As unemployment rises, Uncle Sam has jobs

The economic downturn has forced private industry and state and local government to shed jobs, but one major employer in the country is hiring: The federal government.

While the nation's 11 million unemployed and the millions more who fear losing their jobs may feel Washington should streamline too, economists say a strong federal work force is key to economic recovery. Were President Barack Obama to put any of the nearly 2 million federal civil servants out in the street in the middle of the worst economic downturn since the Great Depression, the consequences could be dire.

"Federal belt-tightening would worsen the problem right now," said Kevin Hassett, director of economic policy studies at the American Enterprise Institute, a conservative think tank. "Most economists agree that the federal government is a built-in stabilizer," said Hassett, a former adviser to GOP presidential campaigns.

Obama's proposed $800-plus billion economic aid plan, which includes heavy spending on public works, is expected to increase the ranks of government workers, although mostly at the state and local level.

That measure is working its way through Congress just as Microsoft Corp., Pfizer, Caterpillar, Home Depot and scores of other companies are shedding workers, and governors are asking or ordering state workers to accept furloughs, salary reductions, truncated workweeks or reduced benefits.

Simply letting federal workers go is "penny-wise and pound foolish," said Max Stier, president of the Partnership for Public Service, a nonprofit group that works to revitalize the government and its work force. "We had a situation where we had a single person monitoring toys coming in from abroad. The result: You get lead-tainted toys coming in to the country," Stier said. "We need people looking out for the public good."

Paul Light, professor of public service at New York University, also thinks more, not fewer, federal workers are needed on the front lines. He said other steps could be taken to trim costs. The Obama administration has suggested reducing the number of managers at the middle levels, he said.

"That would be a good thing," Light said. "What he hasn't suggested is that we reduce political appointees at the senior level. I just think you could do some things to say to the public, 'Look, the federal government is going to make its share of sacrifice and it's more than just having energy-efficient buildings.'"

The government's civilian, nonmilitary work force peaked in the late 1960s at about 2.3 million. It was 2 million or more through the mid-1990s, when the government cut more than 400,000 jobs - many through military base closings. Since 2001, civilian employment in the executive branch, excluding postal employees, has edged upward from 1.7 million to about 2 million, largely because of new homeland security jobs.

More federal job openings are on the horizon.

A report released in January by Christina Romer, head of the White House Council of Economic Advisers, and Jared Bernstein, an economic policy adviser to Vice President Joe Biden, predicted that more than 90 percent of the 3 million to 4 million jobs that Obama proposes to save or create would be in the private sector.

But the report also estimated that 244,000 government jobs - some at the federal level, but more at the state and local level - would be created or saved.

That was based on a $600 billion stimulus package; the one being debated in Congress is more than $800 billion.

Moreover, many baby boomers who are getting government paychecks are at retirement age. The Office of Personnel Management estimates that 58 percent of supervisory and 42 percent of nonsupervisory workers who were on the federal payroll as of October 2004 will be eligible to retire by the end of next year. The financial meltdown, however, has prompted some to delay retirement.

Cynthia Bascetta, 56, director of health care at the Government Accountability Office, has 31 years of federal service under her belt. She said she thought retiring in these troubled economic times was too risky. So she will wait at least a year to retire, even though she recently moved to Fredericksburg, Va., and now has to commute by train to her job in Washington.

"I know of a few people who feel as though they need to stay because they have children they need to put through college, and they've lost a lot in college funds," she said. "Others are just anxious about their financial situation."

Other older workers are seeking federal jobs, which come with job security, health and life insurance, a federal retirement program, paid vacations and leave and other benefits.

When the national job market began tightening in the first quarter of last year, FedJobs.com, a business that has been helping federal job hunters since 1974, started hearing from 50- to 65-year-olds instead of 25- to 40-year-olds.

"All of a sudden, it's a much older clientele calling up saying they're interested in government work because they lost their jobs, their companies merged, their companies went bankrupt and they're looking for stability," said Ross Harris, sales and marketing director for the site. "The perception is that federal work is more stable - that there aren't as many layoffs."

Rising unemployment and excitement about working for Obama combined to motivate about 350,000 people to apply for 3,000 to 4,000 political appointee positions in his new administration. Jumping to the federal payroll, however, doesn't necessarily mean moving to the nation's capital; more than 80 percent of federal civil workers are employed outside the Washington metro area.

Federal employment has not completely escaped the impact of the economic downturn, While no government-wide hiring freeze has gone into effect, some departments and agencies are taking belt-tightening moves.

Obama, for example, froze the pay of some White House employees.

"During this period of economic emergency, families are tightening their belts, and so should Washington," Obama said.

But it was a symbolic move. The pay freeze only affects roughly 100 White House employees earning more than $100,000 a year.