The stereotypical civil servant isn’t a risk-taker. Government workers typically earn much less than they would in the private sector; in exchange, they get more certainty. Government jobs are associated with gold-plated pensions (now a little tarnished), health benefits, and near-rock-solid job security. Those long-term perks are worth a lot, particularly during a recession: Government workers can rest relatively easy while private firms make cuts and layoffs.
That security is effectively part of government workers’ compensation. Taking it away is tantamount to a pay cut, and it appears government workers recently took a big one. Government employment started falling toward the end of the last recession and hasn’t recovered.
A new paper by economists Harvey Rosen, from Princeton, and Jason Kopelman, from Lublin Associates, measures exactly how much job security declined for government workers during the recession. They studied job loss among 800,000 private, federal, state, and local employees over the 18 years between 1984 and 2012. In previous recessions private sector workers had an 11 percent probability of losing their job. Government workers’ odds were much lower: federal workers faced a 5 percent chance of job loss; state and local workers, 7 percent.
The last recession was harder. Private sector job loss increased to 12 percent and federal job loss rose to 7 percent. But the rate of state and local job loss stayed almost the same compared to earlier recessions, with the notable exception of public school teachers, whose chances of losing their jobs during the recession jumped from 5.4 to 6.8 percent.
The persistent job security among state and local workers is surprising. In 2013, 250,000 fewer people worked for the government than did in 2009. More than 88 percent of those lost jobs came from a decline in state and local government employment, a drop Yale economists Ben Polak and Peter Schott dubbed “America’s Hidden Austerity Program.”They estimate that the number of local government workers didn’t fall so much in previous recessions. How could local employment fall so dramatically while job loss rates stayed the same?
Rosen is not sure. He points out that workers he studied were not fired “for cause.” One reasonable explanation would be that some older civil servants were forced into early retirement (which means they are still supported by tax-payer dollars through their pensions and there’s less austerity that previously presumed), and no one was hired to replace them. In that case, state and local government jobs provide the same level of on-the-job security, but they are harder to come by.
Government workers at all levels still have it better than private sector workers, at least from a job-security standpoint. But with declining benefits and fewer jobs, working for the government isn’t as civil as it once was.
