Wage and salary employment in the Federal Government is projected to grow by 2.5 percent through the year 2014, compared to 14 percent growth projected for salaried employment in all industries combined. Job growth generated by increased homeland security needs may be largely offset by projected slow growth or declines in other Federal sectors due to governmental cost-cutting, the growing use of private contractors, and continuing devolution—the practice of turning over the development, implementation, and management of some programs of the Federal Government to State and local governments.

Staffing levels in government, while relatively stable in the short run, can be subject to change in the long run due mainly to changes in public policies as legislated by the Congress, which affect spending levels and hiring decisions for the various government departments and agencies. In general, over the coming decade, domestic programs are likely to see cuts in their budgets as Congress seeks to reduce the Federal budget deficit, but the cuts will likely affect some agencies more than others. Any employment declines, however, generally will be carried out through attrition—simply not replacing workers who retire or leave the Federal Government for other reasons. Layoffs, called “reductions in force,” have occurred in the past, but they are uncommon and usually affect relatively few workers. In spite of this, there still will be numerous employment opportunities in many agencies, due to the need to replace workers who leave the workforce, retire, or accept employment elsewhere.

While there will be job openings in all types of jobs over the coming decade, demand will continue to grow for specialized workers in areas related to border and transportation security, emergency preparedness, public health, and information analysis.

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A study by the Partnership for Public Service, which surveyed Federal department and agency hiring needs for the 2005-2006 period, found that most of the new hires in the Federal Government will come in 5 major areas. They are: security, enforcement, and compliance, which includes inspectors, investigators, police officers, airport screeners, and prison guards; medical and public health fields; engineering and the sciences, including microbiologists, botanists, physicists, chemists, and veterinarians; program management and administration; and accounting, budget, and business, which includes revenue agents and tax examiners needed mainly by the Internal Revenue Service. The Department of Health and Human Services will need health insurance specialists and claims and customer service representatives to implement the Medicare Prescription Drug benefit. Patent examiners, foreign service officers, and lawyers also are in high demand.

The distribution of Federal employment will continue to shift toward a higher proportion of professional, business and financial operations, and protective service workers. Employment declines will be the greatest among office and administrative support occupations and production occupations, due to increasing office automation and contracting out of these jobs.

Competition is expected for some Federal positions, especially during times of economic uncertainty, when workers seek the stability of Federal employment. In general, Federal employment is considered to be relatively stable because it is not affected by cyclical fluctuations in the economy, as are employment levels in many private sector industries.

Earnings

In an effort to give agencies more flexibility in how they pay their workers, there are now several different pay systems in effect or planning to be implemented over the next few years within the Federal Government. The two largest departments that are experimenting with new pay systems are the Departments of Defense and Homeland Security. The new systems incorporate fewer, but wider, pay “bands,” instead of grade levels. Pay increases, under these new systems, are almost entirely based on performance, as opposed to length of service.

SOURCE: U.S. Office of Personnel Management

It is the case, however, that the majority of professional and administrative Federal workers are still paid under the General Schedule (GS). The General Schedule, shown in table 4, has 15 grades of pay for civilian white-collar and service workers, and smaller within-grade step increases that occur based on length of service and quality of performance. New employees usually start at the first step of a grade; however, if the position in question is difficult to fill, entrants may receive somewhat higher pay or special rates. Almost all physician and engineer positions, for example, fall into this category. In an effort to make Federal pay more responsive to local labor market conditions, Federal employees working in the continental U.S. receive locality pay. The specific amount of locality pay is determined by survey comparisons of private sector wage rates and Federal wage rates in the relevant geographic area. At its highest level, locality pay can lead to an increase of as much as 26 percent above the base salary. Every January a pay adjustment tied to changes in private sector pay levels is divided between an across-the-board pay increase in the General Schedule and locality pay increases.

In March 2005, the average earnings for full-time workers paid under the General Schedule were $61,735. General attorneys, who earned $105,557 on average, was one of the higher paid occupations, while average earnings for nursing assistants was only about half the average for all occupations (table 5).

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Table 5. Average annual salaries for full-time workers under the General Schedule in the Federal Government in selected occupations, 2005

SOURCE: U.S. Office of Personnel Management

For those in craft, repair, operator, and laborer jobs, the Federal Wage System (FWS) is used to pay these workers. This schedule sets Federal wages so that they are comparable with prevailing regional wage rates for similar types of jobs. As a result, wage rates paid under the FWS can vary significantly from one locality to another.

In addition to base pay and bonuses, Federal employees may receive incentive awards. These one-time awards, ranging from $25 to $10,000, are bestowed for a significant suggestion, a special act or service, or sustained high job performance. Some workers also may receive “premium” pay, which is granted when the employee must work overtime, on holidays, on weekends, at night, or under hazardous conditions.

Benefits are an important part of Federal employee compensation. Federal employees may choose from a number of health plans and life insurance options; premium payments for these policies are partially offset by the Government. In addition, workers hired after January 1, 1984, participate in the Federal Employees Retirement System (FERS), a three-tiered retirement plan including Social Security, a pension plan, and an optional Thrift Savings Plan. Worker participation in the Thrift Savings Plan is voluntary, but any contributions made are tax-deferred and, up to a point, matched by the Federal Government. In addition to other benefits, some Federal agencies provide public transit subsidies in an effort to encourage employee use of public transportation.

Federal employees receive both vacation and sick leave. They earn 13 days of vacation leave a year for the first 3 years, 20 days a year for the next 12 years, and 26 days a year after their 15th year of service. Workers also receive 13 days of sick leave a year, which may be accumulated indefinitely. About 23 percent of all Federal civilian employees outside the Postal Service were union members or covered by union contract in 2004, substantially more than the 14 percent found for salaried workers in all industries.

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