Eye Opener: Obama Caps Pay Raises at 2 Percent — Not Too Bad For Government Work — Eight Reasons Why Big Government Hurts Economic Growth Video — House quietly gives ‘bonuses’ to top aides — Obama labor relations proposal draws praise — Unions mark gains under Obama — CBO: Characteristics and Pay of Federal Civilian Employees — On the Size and Growth of Government
“The ‘Strong’ Government, the ‘Weak’ Government”
Cartoon comparing the Reconstruction policies of President Ulysses S. Grant and President Rutherford B. Hayes, 1880
— The Granger Collection, New York
President Obama’s call last year for “shared sacrifice” doesn’t extend to federal employees, at least based on the details of his administration’s 2010 budget.
Meanwhile, according to Forbes’ layoff tracker, there have been 596,205 layoffs since November 2008 at large public companies; even local school districts aren’t immune. That’s just a sliver of the total unemployed, which government data estimate to be 9.7 percent of the workforce, or an alternate method of reckoning that counts discouraged workers puts at 20 percent.
Some of the Feds’ hiring increases have been stunning. If you look at the four-year period from 2006 to 2010, the number of Homeland Security employees has grown by 22 percent, the Justice Department has increased by 15 percent, and the Nuclear Regulatory Commission can claim 25 percent more employees. (These figures assume that Congress adopts Mr. Obama’s 2010 budget without significant changes.)
A 39-page “dimensions” document accompanying the White House’s 1,380-page appendix offers justifications for each new hire. Homeland Security says its new employees will “increase border security.” The Agency for International Development wants to improve “the management and stewardship of foreign assistance programs.” The Smithsonian Institution wants “additional security guards.” And so on… (Original Source: CBS News Blog w/updated links)
Washington Post: By Ed O’Keefe, Sep 1, 2009
Happy Tuesday! … or maybe not, for civilian federal employees.
President Obama has decided to reduce pay increases for civilian federal workers from 2.4 percent to 2 percent, citing the economic downturn and the ballooning federal budget as reasons for the cut.
“Invoking the ‘national emergency’ declared after the Sept. 11, 2001, terrorist attacks, the president said in a letter to House Speaker Nancy Pelosi that under pay formulas set in 1990, federal employees with pay levels set according to comparable local wages are set for average pay increases of 18.9%,” reports Jonathan Weisman of the Wall Street Journal.
The AP notes that “Obama also said that he would decide by Nov. 30 on the need to take action on ‘locality pay,’ wages over and above the base federal rates that are determined according to geographic living costs and comparable private-sector pay.”
But wait — there’s still hope! Gov Exec’s Alyssa Rosenberg notes that Congress can override the president’s decision and the White House promises to adhere to pay parity in subsequent years.
In his letter to Pelosi, Obama said that “with unemployment at 9.5 percent in June to cite just one economic indicator, few would disagree that our country is facing serious economic conditions affecting the general welfare. The growth in Federal requirements is straining the Federal budget. Full statutory civilian pay increases costing $22.6 billion in 2010 alone would put even more stress on our budget.”
Obama said he did not believe his decision would impact the government’s ability to keep or attract employees.
“To the contrary, since any pay raise above the amount proposed in this alternative plan would likely be unfunded, agencies would have to absorb the additional cost and could have to reduce hiring to pay the higher rates.”
“The proposal angered employee groups and lawmakers who have pushed for pay parity between civilians and members of the military,” Rosenberg reports. Members of the military will either earn a 3.4 percent raise if appropriators follow guidelines in the 2010 Defense authorization act, or a 2.9 percent boost if Congress sticks to President Obama’s February recommendations.
Colleen M. Kelley, president of the National Treasury Employees Union said her union “continues to support the principle of military and civilian pay parity and will continue to work to include an amount equal to the military raise, whether it is 2.9 percent or 3.4 percent.”
“NTEU recognizes that it has been a very difficult year for the economy, however pay parity is an important and accepted principle and reflects the reality that civilian and military workers both contribute strongly to our country and deserve the same percentage pay increase.”
IBD Investors Opinion, August 27, 2009
Compensation: Americans are fulminating at Washington in historic terms this summer, but here’s something to anger them further: With joblessness near 10%, federal salaries are rising faster than the private sector.
Angry constituents at town halls are already armed with a quiver full of gripes. Watch out if the town hell hordes hear about another pricey government injustice: the growing pay advantage of federal employees over private workers.
Chris Edwards, director of tax policy studies at the Cato Institute, touched quite a nerve earlier this week when he relayed the latest wage data, categorized by industry, from the Commerce Department’s Bureau of Economic Analysis. “The new data show that average federal compensation is now more than double the average in the private sector,” Edwards noted.
He added: “In 2008, the average wage for 1.9 million federal civilian workers was $79,197, which compared to an average $49,935 for the nation’s 108 million private sector workers. The federal advantage is even more pronounced when worker benefits are included. In 2008, federal worker compensation averaged a remarkable $119,982, which was more than double the private sector average of $59,909.”
Those whose livelihoods depend on taxpayers immediately got their backs up. The Federal Times, for instance, accused Edwards of comparing “FAA air traffic controllers to Wal-Mart cashiers.”
In a follow-up posting, Edwards answered those who charge he doesn’t appreciate the need for an elite, highly educated federal work force: “That is the reason why I focused on the pay trend over the last eight years” in which “the federal worker compensation advantage rose from 66% in 2000 to 100% in 2008.”
And he asked and answered the obvious question: “Has the composition of the federal work force really changed that much in just eight years to justify such a big relative gain? I doubt it.”
The Cato expert also pointed to federal careerist bureaucrats’ infamous job security. “The voluntary quit rate in the federal government is just one-third or less the quit rate in the private sector,” he noted. Federal employees “know that the overall package of wages, benefits and extreme job security is very hard to match in the competitive private market and so they stay put.”
As to the best and brightest working for Uncle Sam who deserve what they make, Edwards countered: “For the overall economy, federal hiring of top caliber workers is a problem because it draws talent away from high-valued activities in the private sector.”
He added: “In France, most of the best minds move from the elite schools into the national government, and the economy is weaker for it. In the United States, most of the best minds are attracted to places such as Silicon Valley, not Washington, and we prosper because of it.”
With ordinary Americans enduring the worst economy in decades, watching government elites live high on the hog can only turn up the heat that politicians feel from those they claim to serve.
Says student-loan subsidies needed in hiring market
Washington Times, By Stephen Dinan
Originally published August 25, 2009, updated August 26, 2009
A month after they voted to punish some corporate executives for taking hefty bonus payouts, members of the House of Representatives quietly gave their own staffers a new potential bonus by making even their top-earning aides eligible for taxpayer dollars to repay their student loans.
The change, which took effect in May, means House employees earning up to $168,411, or the top level, are now eligible for government-funded subsidies to help pay down their student loans.
House officials defend the change as a job-related benefit necessary to keep the government competitive in the hiring market – the same argument corporate chieftains used to defend their own pay scales.
“There’s still a tremendous demand for high-end Hill talent even in this current job market. Expanding eligibility for the benefit allows us to retain valued and seasoned personnel who might otherwise be lured away to more financially lucrative pursuits,” said Kyle Anderson, a spokesman for the House Administration Committee.
The committee, which has jurisdiction over internal House employment, salaries and expenses, directed House officials to make the change.
But taxpayer advocacy groups said that straightforward salary increases – not new perks and bonuses – are the best way to attract and retain talent. Offering bonuses to some of the best-paid Capitol staffers just feeds into popular resentment toward Washington, said Thomas A. Schatz, president of Citizens Against Government Waste.
“It’s another example of the imperial Congress and setting themselves aside from the rest of the country,” Mr. Schatz said. “It goes along with the congressional jets, the executive jets. It goes along with the travel. It fits in with all the concerns about spending generally in Washington.”
Although widely used in the federal work force, the job-related perk of paying off an employee’s college bills is rarely offered in the private sector, employment analysts say.
The move to boost the income cap was made just a month after the House voted 328-93 in March to slap a 90 percent tax on bonuses for executives from companies that took bailout money from the Troubled Asset Relief Program. The Senate never followed suit, and the bill didn’t become law. The salaries and dollar amounts involved in those bonuses were far higher than what’s at stake in the House program.
The House program is expected to cost $12.6 million this fiscal year. As of August, it was making payments for 2,251 staffers. The Office of the Chief Administrative Officer, the branch of the House that administers the program, is unable to estimate how many of those staffers are taking part under the new, higher-income limits, spokesman Jeff Ventura said.
Mr. Ventura said that, with members of the House up for election every two years, job security is uncertain and the student loan program helps attract talent.
“We regard this benefit as a major job recruitment and retention tool,” he said. “Even in a bad job market, we compete with the private sector for the kind of talented employees government work today demands.”
The House program pays up to $10,000 a year, with a maximum lifetime benefit of $60,000. Staffers making any salary are now eligible, though their total compensation – including the loan repayment – cannot exceed the 2009 cap of $168,411. From 2008 through May of this year, the cap was $145,159.
Each representative decides which of his or her staffers can receive the benefit. The funds do not come out of each congressional office’s budget, but there is a cap on how much each office can spend on the repayments. That cap was also boosted by 75 percent in May.
Student loan repayments are not limited to the House. The Senate offers a far less generous program than the House, while many executive branch agencies offer a similar program.
The Senate income eligibility cap for its program is $146,500 this year, which is about $23,000 less than the maximum a staffer could make. The Senate caps lifetime payments at $40,000 – $20,000 less than the House.
A spokeswoman for the secretary of the Senate, who administers the program, said the program will cost $4.7 million this year. That’s up from $1 million in 2002, when the program began, but down from 2003, the peak year, when the Senate spent $6.8 million.
The spokeswoman would not give details about who participates in the program and referred questions to the committees with oversight over the program.
Executive branch agencies, meanwhile, provide an extensive annual accounting of their student loan benefit program, and it appears to be just as popular as the House program.
In 2008, federal agencies spent more than $51 million to repay loans for 6,879 employees, at an average benefit of $7,511. The 2008 figure is a 22 percent jump over the previous year.
Like House staff members, executive branch employees are limited to $10,000 per year and $60,000 over their lifetimes. The loan repayments are taxable.
GovExec: By Alyssa Rosenberg, August 14, 2009
Union leaders this week applauded a draft executive order on labor-management relations for broadening the scope of subjects eligible for bargaining and granting an appropriate mix of organizations seats on a labor-management council.
The White House declined to comment on whether the draft order, reported by the Washington Post on Wednesday, was in fact the document President Obama is considering, or whether its release is imminent. But multiple union officials confirmed that the provisions in circulation essentially are those they have discussed with the Obama administration.
The order, similar to one President Clinton issued, would create an executive branch council on labor-management relations and separate forums within individual agencies. But the Obama draft differs in several respects, including avoiding the term “partnership,” which became a key word in the Clinton administration.
National Federation of Federal Employees President William Dougan applauded a section of the Obama draft that would make bargaining over (b)(1) or so-called permissive subjects mandatory for all federal agencies. Those subjects normally are not liable to negotiation in the federal sector, and include issues such as the number and qualifications of employees assigned to work on projects, the technology involved and work methods.
While the Clinton executive order simply instructed agency heads to “negotiate over the [permissive] subjects…and instruct subordinate officials to do the same,” Obama’s draft order goes a step further. The proposal says Obama has decided agencies will negotiate over permissive subjects at a national level, and “any attempts by department or agency heads or their subordinate officials to revoke my election shall have no force or effect.”
Without that requirement, some agencies might balk at bargaining over permissive subjects, Dougan said. The language in the proposed order ensures consistency governmentwide, he noted.
Unlike Clinton’s order, Obama’s proposal would not require labor and management representatives to be trained in consensus-based bargaining techniques, including dispute resolution methods that bypass traditional grievance and negotiating processes, and interest-bargaining approaches that avoid portraying negotiation as competition. John Gage, president of the American Federation of Government Employees, in February criticized consensus requirements, noting they could give a false sense of the common ground between labor and management.
Obama’s proposal also would change the composition of the council charged with overseeing governmentwide labor-management cooperation. While the director of the Office of Personnel Management still would chair the panel, the draft would eliminate the seats Clinton set aside for the deputy secretary of Labor, director of the Federal Mediation and Conciliation Service, and head of the AFL-CIO’s public employees division.
Those members would be replaced by the president of the International Federation of Technical and Professional Engineers and representatives of the Senior Executives Association and the Federal Managers Association under Obama’s version. That draft also would add a spot for another federal employee union. (The American Federation of Government Employees, National Treasury Employees Union and NFFE would retain the seats Clinton granted them.)
Mark Roth, AFGE’s general counsel, praised the proposed changes to the board’s composition, saying the new members would have a stronger interest in participating and would bring more relevant experience than the representatives they replaced.
“We actually were instrumental in getting some of the folks who were on it under the Clinton order off it, because our experience was they really never stepped up to the plate,” he said. “They never cared, [and] they never stepped up. The Department of Labor [and] the Federal Mediation and Conciliation Service [are] nice [agencies]. But what did they accomplish?”
Dougan said he thought including two more federal employee unions on the council would be productive, because they would broaden the cross-section of front-line employees represented.
National Treasury Employees Union President Colleen Kelley declined to comment specifically on the proposed executive order, but said re-establishing some kind of formal relationship between unions and management was a priority.
“It does not matter if the new system is called ‘partnership’ or ‘collaboration,’ or simply ‘team work,’ ” she said. “Any new system of cooperation between management and employees should ensure that the voices of the front-line workforce are heard and respected concerning important workplace matters.”
Union leaders and members are saying that eight months into the Obama administration it is clear that labor’s unprecedented investment in the effort to support the election of the president and a 60 vote Democratic majority in the Senate is paying off.
From executive orders that help construction workers to a new law that restores the right to sue employers for pay discrimination based on sex, race, religion or other factors, they are happy about a long list of what they see as first steps that help working men and women.
Having said that they are ready now for what they see as some bigger tasks and challenges.
Unions are pleased with the president’s strong verbal support for their top cause, the Employee Free Choice Act but they want to see that translate into active lobbying by the administration for labor law reform.
Labor is also pushing now for a second massive economic stimulus bill, something the administration is not yet ready to support. The first stimulus bill was too small, according to AFL-CIO Secretary Treasurer Richard Trumka.
In the area of health care labor and the administration are in agreement, provided the reform undertaken includes a strong government-run public health plan option.
The unions’ original hope to get the Employee Free Choice Act onto the president’s desk by Labor Day faded because of the delay in seating the potential filibuster-breaking 60th Democratic senator, Al Franken of Minnesota, and the explosive debate on health care that followed almost immediately.
An aide to Communications Workers President Larry Cohen, one of a group of labor leaders who met with Obama at the White House in July, said in a phone interview at that time that the president had promised to do “what he could” to pass labor law reform, but was not specific.
American Federation of State County and Municipal Employees President Gerald McEntee said, also that day, “Some people wanted the president to move faster on the bill,” but given the economic crisis Obama faced upon entering office, “I don’t see how he could.”
Opposition by some Blue Dog Democrats and others to the majority sign up provision of the Employee Free Choice Act forced the bill’s lead sponsor, Sen. Tom Harkin, D-Iowa, to entertain alternative ways of achieving the intent of the provision, with no agreement yet reached.
Outright disagreement between labor and the administration arose on only one issue during the past eight months.
The president plans to cap production of the F-22 fighter plane at the present 187 ordered, not including seven more that many senators, and the Machinists, want at a cost of $1.75 billion. The union is concerned that not building the extra planes will mean layoffs of thousands of union workers.
On a second matter unions support where the president is going but would actually go even further:
President Obama’s Defense Department wants to change, not eliminate, George Bush’s so-called “National Security Personnel System” for DOD civilian workers. The NSPS strips them of all collective bargaining rights, allows bosses to set pay amounts and rates, offers no protection for whistleblowers and eliminates most effective grievance procedures. The administration wants to fix these problems and freeze the NSPS at the current level of 205,000 workers it covers.
The American Federation of Government Employees, the main union representing Defense Department workers, wants to go further. It seeks to take all workers out from under the NSPS and trash the system for good. The union’s president, John Gage, says the system is unworkable, unfair and unnecessary.
With the exception of these concerns labor has a great deal of praise for what the president is doing.
“The number one thing he’s done for workers is taking on the economy and being bold with the stimulus package to create jobs for workers,” AFSCME President Gerald McEntee said about the president in a recent telephone interview.
McEntee, who chairs the AFL-CIO Political Committee, played a key role in organizing labor’s election effort for Obama and Congress. “And the fact that the president is willing to take on a number of critical issues, especially health care, is vital,” McEntee adds.
It didn’t hurt his relations with labor when the President invited labor leaders into the White House on July 13 to discuss the Employee Free Choice Act, health care, the economy and pensions or when he signed legislation restoring the right of women and minorities to sue employers for paycheck discrimination.
The president’s record on labor issues is drawing a sharp contrast with the record of his predecessor in that office:
The president has overturned a whole series of Bush anti-worker executive orders, substituting for them his own pro-worker orders: These include restoring project labor agreements on federally funded construction, ordering federal agencies to post notices in workplaces that inform workers of their rights, including the right to join unions, and ending the Bush policy of contracting work out to private companies.
The president has issued another executive order that bans any entity receiving federal funds from using those dollars against union organizing.
The pro-labor tone was set right from the beginning. The first law the Democratic-run Congress passed and Obama signed was the Lily Ledbetter Act, named for an Alabama grandmother who sued Goodyear for pay discrimination based on sex. She had won in lower courts but lost in the Supreme Court, 5-4, in 2007. The justices said suits could not be filed after 180 days on the job.
Ledbetter, a supervisor, had been with Goodyear 19 years before she found out she was the victim of discrimination.
“Wage discrimination has a tangible and negative impact on women and families. When women receive less than their deserved compensation, they take home less for themselves and their loved ones,” the president said when he signed the law.
Posts in the Obama administration have been filled with labor allies. The president nominated incumbent Democrat Wilma Liebman to chair the National labor Relations Board and intends to formally nominate two pro-worker attorneys to be board members.
The president named Jordan Barab, a longtime job safety and health advocate, to be deputy Occupational Safety and Health Administration administrator. Barab intends to revive the agency’s now-dead ergonomics rule and he’s begun work on two important safety rules.
One limits worker exposure to diacetyl, a food additive that causes lung disease.
The other would control explosive, factory floor “combustible dust.” The dust caused a blast at Imperial Sugar in Georgia, killing 14 workers in Feb., 2008. OSHA, under Bush rule, did nothing.
The president has nominated former Airline Pilots Association President Randy Babbitt to head the Federal Aviation Administration. Babbitt has already signaled his desire to sign a new contract with the National Air Traffic Controllers Association, a contract trashed by the Bush administration.
The president has named former Association of Flight Attendants President Linda Puchala to sit on the National Mediation Board, which oversees labor-management relations in airlines and railroads and has nominated Joe Szabo, the legislative director of the United Transportation Union in Illinois as the first unionist to head the Federal Railroad Administration.
Obama has supported labor backed changes in college student loan availability that eliminate the role of banks as middle men in the system. Together, the administration and labor leaders worked with House Education and Labor Committee Chairman George Miller, D-Calif., to introduce legislation that will accomplish this.
The bill caps repayments from graduates at a maximum of 15 percent of yearly income. If a graduate signs up for public service, including police, fire and other public work, the loan is forgiven altogether.
The president has supported the Steelworkers campaign for “green jobs” to revitalize U.S. manufacturing. They are a key part of the $787 billion stimulus package.
Characteristics and Pay of Federal Civilian Employees
CBO Study, March 2007
Introduction and Summary
Today, more than 100 federal agencies employ about 2.7 million civilian workers—or roughly 2 percent of the total U.S. workforce—in jobs representing more than 800 occupations.1 Those occupations generally require workers who have a broad complement of training, skills, and experience, and the federal government competes with other employers for individuals who possess the “right” mix of attributes.
To better understand the characteristics of federal workers, the Congressional Budget Office (CBO) examined the attributes of a subset of the government’s civilian workforce: the roughly 1.4 million salaried workers—not including employees of the Postal Service—who fill full-time permanent positions in the executive branch. Basically the government’s white collar employees, that group represented slightly more than one-half of all civilian workers in December 2005…
As the data and findings in this paper suggest, that portion of the federal workforce is characterized by diversity of people and occupations, changes over time, and complexity of pay structure. In particular:
About two-thirds of the government’s salaried fulltime civilian workers are employed in professional and administrative occupations, and that proportion has increased over time. On average, those employees are older, better educated, and more highly paid than federal employees in those occupations in the past…
Federal Workers in 2005
As of 2005, permanent full-time civilian federal employees were 47 years old, on average, and each had about 16 years of federal service. The distribution of those federal employees’ ages suggests that more than 60 percent of them were between 40 and 59 years old in December 2005.
That finding has led some observers to warn of an impending wave of retirements in the government’s full-time permanent workforce. (As discussed later, the average worker in that group retires from federal service at age 59.) If the current pace of turnovers continues, the government may face the challenge of hiring a large number of new employees (large when compared with recent trends in hiring).
The federal government’s Office of Personnel Management (OPM) expects a peak in federal retirements in the full-time permanent workforce between 2008 and 2010 and has expressed concern about the institutional knowledge that will be lost with those retiring employees.
Two peaks can be seen in the distribution of the years of service of full-time federal employees—one at less than 5 years and one at 15 to 19 years. Those peaks reflect the tenure of federal workers who continued in government service after the reductions in the federal workforce during the 1990s and the increase in federal hiring after September 11, 2001.
In 2005, nearly 60 percent of federal workers had 15 or more years of federal service, but only about 10 percent of them had tenures of between 10 and 15 years (as a consequence of the relatively low rate of hiring during the early and middle 1990s). The peak in 2005 in the tenure distribution for employees who had less than five years of service represents people who were hired to address concerns about homeland security.
In 2005, slightly fewer than half of full-time permanent federal employees had a college degree, and 17 percent held some type of graduate degree (see Table 1 on page 12).5 Many of the employees who had such degrees held positions that were classified by OPM as professional occupations. Nearly 90 percent of professional employees had a college degree, and nearly half of that group also had a graduate degree.
The demographic characteristics of full-time permanent civil servants varied by occupational category in the government’s personnel system. For example, women and blacks made up substantial proportions (80 percent and 30 percent, respectively) of those employed in clerical occupations.
Latinos held 18 percent of the jobs in the Other occupational category (despite making up only about 8 percent of the full-time permanent workforce); veterans of military service held 36 percent of the jobs in the Other category. (That category is composed primarily of protective services occupations.) Veterans accounted for smaller but still sizable fractions in the remaining occupational categories—for example, 25 percent of administrators and 14 percent of professionals were veterans.
It is important to understand how the characteristics of full-time permanent federal workers compare with the characteristics of workers in similar private-sector jobs. However, the data collected in surveys of the private sector—for example, the Census Bureau’s Current Population Survey (CPS)—are not directly comparable with the personnel data on which CBO’s analysis is based.6 Box 3 describes some limited findings about worker characteristics based on the CPS data alone.
Significant changes in the federal workforce over the past several decades have reduced the total number of federal employees, including part-time, temporary, and bluecollar workers, from 3.2 million in 1990 to 2.7 million in 2005—or just a little smaller than the size of the federal workforce in the mid-1970s. In addition to changes in the number of people employed, the distribution of occupations in the total federal workforce has shifted over the past 30 years to encompass more professional and administrative positions and fewer clerical positions.
Since 1975, the average age, tenure, and educational attainment of federal employees have all increased. The number of salaried full-time permanent federal employees rose slightly over the 1975–2005 period, climbing from 1.22 million to 1.44 million;7 however, that relatively small overall increase masks fluctuations during that time.
During the period, the average age of those full-time civil servants climbed from 42 to 47, with the bulk of that increase occurring since the 1990s. Moreover, the boost in the average age was mirrored by an increase in the average length of service.
As of December 2005, about one-quarter of the government’s salaried full-time permanent employees were at or above the minimum retirement age of 55, and about 10 percent of them were eligible to retire immediately with an unreduced pension.9 The proportion of full-time federal employees who hold a bachelor’s degree also grew to a significant extent from 1975 to 2005, rising from about 30 percent to 49 percent.
All occupational categories experienced an increase in the proportion of college degree holders over the period. The extensive formal training generally required for professional occupations has meant that the proportion of people in that category who have degrees has always been sizable. But the proportion in the administrative category has grown—from 39 percent in 1975 to 50 percent by 1990—and it has remained at that level in the years since.
In addition to substantial numbers of bachelor’s degree holders, the Professional and Administrative occupational categories are also the two that can claim any significant proportion of graduate degrees.
For professionals, those percentages rose from more than 26 percent of workers who had such degrees in 1975 to more than 40 percent in 2005; for administrators, the proportion of graduate degree holders nearly doubled over the period, growing from about 7 percent to almost 14 percent.
The number of bachelor’s degree holders increased in the other occupational categories as well. The proportion of full-time technical employees who have a college degree rose from 11 percent in 1975 to about 15 percent in 1990 and then remained at that level through 2005. The proportion of employees in the Clerical category who have a bachelor’s degree saw an upturn over the period, from about 4 percent to 11 percent. And the proportion of degree holders in occupations in the Other category rose dramatically, from just 4 percent in 1975 to about 16 percent in 2005.
The diversity of the full-time permanent federal workforce has increased over the past several decades. The percentage of women civil servants rose from 42 percent in 1975 to 47 percent in 1985, a share that has remained fairly steady. The percentage of federal employees who are Hispanic has risen from about 4 percent during the 1980s to about 8 percent in 2005.
The representation of other minority groups in the full-time workforce has also been increasing over time. The proportion of black civil servants grew modestly from 1975 to 1990 and has changed little since then, whereas the proportions of Asians and Pacific Islanders in the workforce have been expanding in recent years more rapidly than in the past. The proportion of American Indians and Alaskan natives who are employed by the federal government is so small that a trend can hardly be detected.
Federal employees who are retired from the military services make up about 6 percent of the full-time permanent workforce, a share that has remained roughly stable since 1980.
See Complete (PDF) Report: Characteristics and Pay of Federal Civilian Employees
On the Size and Growth of Government
Thomas A. Garrett and Russell M. Rhine
Economists have long been divided on the role of government in a society. John Maynard Keynes and John Kenneth Galbraith have argued that an economy needs to be continually fine-tuned by an activist government to operate efficiently:
Thus, as an economy grows, a growing government is also necessary to correct private-sector inefficiencies. This school of thought grew primarily out of the Great Depression, when markets seemed to fail and government intervention was viewed as the means to restore economic stability.
Other 20th century economists, such as Frederick von Hayek and Milton Friedman, have argued that an activist government is the cause of economic instability and inefficiencies in the private sector. Government should exist to ensure that a private market operates efficiently; it should not act to replace the market mechanism.
Various data clearly suggest that the size of the federal government in the United States has grown dramatically during the 20th century. One measure of government growth is federal expenditures per capita. This growth did not occur gradually, however.
In the early years of the United States, the federal government spent about $30 per person annually. By the 1910s, government expenditures per capita were about $129, or slightly more than four times the 1792 level.
In 2004, the federal government spent $7,100 per capita, nearly 55 times more than was spent per capita in the 1910s. Spending growth did slow in the mid-1980s and actually decreased in the mid-1990s. By the year 2000, however, per capita spending increased once again.
It is evident that the long-term growth in total per capita government spending is not solely a function of national defense. Federal spending has also increased relative to gross domestic product (GDP) throughout much of this country’s history…
An examination of the components of federal government spending provides insight into which areas the government has increased activity.
Although total per capita spending increased following World War II, several components of federal government expenditures stayed relatively constant or even decreased slightly over the next 50 years: physical resources (e.g., transportation, energy), national defense, and “other functions” (e.g., agriculture, general government, international affairs).
In fact, much of the reduction in federal expenditures per person occurring in the mid- to late 1990s can be attributed to a reduction in national defense spending. However, spending on national-debt net interest payments and human resources grew substantially over the same period. The dramatic increase in human resources that occurred reflects the growth in Social Security payments and the inception of entitlement programs such as Medicare (in 1965).
Another measure of the size of the federal government is the number of cabinet departments. Eight cabinet departments were created from 1788 to 1952. Since 1953, there have been an additional eight cabinet departments established.
In addition to the increase in federal government expenditures, state and local government expenditures per capita have also increased since World War II. Inflation-adjusted expenditures per person were about $759 in 1948, compared with over $4,300 per person in 2004.
The average annual growth rate in real per capita state and local government expenditures was 3.2 percent, compared with an average annual growth.
SUMMARY AND CONCLUSIONS
The past 90 years has seen a dramatic rise in the size and growth of the government in the United States. This article presented various data illustrating this increase in government growth and then focused on several economic theories that attempt to explain this growth. The theories fit into one of two philosophies of government growth: either (i) the growth of government is driven by citizen demand or (ii) the growth in government is a result of government itself, brought on by inherent inefficiencies in the public sector, the personal incentives of public officials, and representative democracy.
The theories discussed in this article are not the only theories on government growth that have been raised. Researchers have suggested that electoral cycles, in conjunction with citizen demand, may play a role in the size and growth of government (Downs, 1957, and Coughlin, 1992).
The expansion of the voting franchise, an arguably more controversial explanation for government growth, was suggested by Meltzer and Richard (1981); their idea is that groups of individuals that were given the right to vote were typically from the lower end of the income distribution and demanded greater government services.
Although each theory was presented here as a stand-alone explanation for government size and growth, the complexity of the public sector and the political process as well as the limits of empirical economic analysis suggest that government growth is likely to be a function of some or all of the above theories.
In addition, many of the theories do a better job at either explaining size or growth, but do not adequately explain the current size of government or its growth over time. Some of the theories have not withstood empirical tests, and debate continues as to whether this is a result of incorrect theory or incorrect empirical modeling…
See Complete (PDF) Report: On the Size and Growth of Government