Donald Trump

Trump Administration 'Alternative Fact' Undercuts Federal Hiring Freeze Announcement

'Counters the dramatic expansion of the federal workforce in recent years' is just plain false.

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TrumpSigningRonSachsPoolviaCNPSipaNewscom
Ron Sachs—Pool via CNP/Sipa US/Newscom

President Donald Trump has signed an executive order freezing federal civilian workforce hiring. At a press conference today new White House press secretary Sean Spicer stated that the freeze was established because it "counters the dramatic expansion of the federal workforce in recent years." Just one problem: There has not been a dramatic expansion in the federal workforce in recent years. According to the latest Office of Personnel Management, the number of federal civilian employees stands at around 2.7 million, just about where it was in 1966. In fact, civilian federal employment is down from its 1990 peak of just under 3.1 million. Relatively speaking this means that in 1966 there was 1 federal employee per 70 citizens and now there is 1 per 121 citizens.

It does bear noting that number of state and local government employees have increased 7.8 million in 1966 to 19.5 million today*; up from 1 per 24 citizens to 1 per 17 citizens today.

While federal government civilian employment has been essentially flat, it is interesting to consider the role of government contractors. Some have argued that lots of services provided by government contractors should actually be moved into the federal government to achieve greater efficiencies. Setting that argument aside, it is very hard to estimate the number of jobs that are supported by government contracts. A 2015 Congressional Budget Office report noted:

Regrettably, CBO is unaware of any comprehensive information about the size of the federal government's contracted workforce. However, using a database of federal contracts, CBO determined that federal agencies spent over $500 billion for contracted products and services in 2012. Between 2000 and 2012, such spending grew more quickly than inflation and also grew as a percentage of total federal spending. The category of spending that grew the most in dollar terms was contracts for professional, administrative, and management services, and the category that grew the most in percentage terms was contracts for medical services.

So how many jobs might $500 billion create? By one very rough estimate, spending that amount would result in about 5 million jobs. Another study that tried to estimate the number of jobs created per billion dollars spent on infrastructure would boost that number to 11.5 million jobs. So notionally speaking, the federal civilian workforce including contracted employees would be, taking the lower estimate, somewhere around 7.7 million, or about 1 for every 42 citizens. Of course, the wages of contracted employees are not frozen.

Whatever the case for freezing federal employees wages, Spicer and the Trump administration have undermined it by offering up an "alternative fact" with regard to actual trends in the number of civilian federal government employment.

Guys, if you don't want "the most dishonest people on earth" distracting the public from your messages, try harder to get, you know, the fact-facts right.

Disclosure: I was a federal government employee for about 3 years working as a medium-level staff economist for the Federal Energy Regulatory Commission 1979-1981. Although it was fairly well paying, I hated my job so much I quit to go work for magazine for half the pay in New York City.

*Number calculated by substracting OPM federal employment numbers from the overall government employment numbers provided by the St. Louis Federal Reserve.

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  1. Regrettably, CBO is unaware of any comprehensive information about the size of the federal government’s contracted workforce. However, using a database of federal contracts, CBO determined that federal agencies spent over $500 billion for contracted products and services in 2012.

    Gosh, what a surprise that CBO doesn’t track this, and can’t come up with info less than five frickin’ years old.

    Regardless, doesn’t sound like Trump’s order affects contract staff, which is the traditional workaround for hiring freezes. Which blows.

    1. RCD: You are right. As I note: Of course, the wages of contracted employees are not frozen.

    2. It should be very easy to calculate that number. My company has to submit budgets, proposals, track supply chain, and we have to keep track of what charge number we’re using down to every 1/10th of an hour. And we’re subject to government audits to make sure we’re doing it right.

      They just don’t want to do the work.

      1. They just don’t want to do the work.

        Maybe they should contract it out.

      2. I can understand why it would be difficult to collate all that information from different contracts across different agencies. And is that information tracked at the employee level or FTE level?

        1. I believe that information is tracked at the FYTW level

        2. My understanding is that the audits are performed to make sure that contractors are not defrauding the government – so companies doing work for the government are require to keep track of where the government’s money is going (paying employees, purchasing parts and material, etc.).

          Some of that information may also exist in the bidding process. A company has to submit a proposal approximating cost and schedule for a government contract (or at least the ones my company deals with). That includes man hours, so the proposal has to call out how many people, at what hourly rate, and for how long are going to be require to deliver the product/service to the government.

          I think the information exists. It’s just a matter of getting it all in one place.

    3. Gosh, what a surprise that CBO doesn’t track this

      Meh. Not really. A much younger Tonio worked for a contracting firm. We had to bill our hours to the contract. I only worked on one contract so billed forty hours per week to that. Other people in the organization worked on multiple contracts, including some for non-government customers. So somewhat complex to measure.

      Now, what you can easily measure is the contract dollars spend on services.

      1. I’d even take a brute force conversion of contract hours to FTEs (2,000 hours = one FTE).

  2. So if there’s only 1 employee for every 124 citizens, why the 35% tax rate?

    1. Drive around the Maryland/Northern Virginia suburbs of DC someday….

      1. Last time I did, I was in a traffic jam of luxury SUVs.

        1. So typical.

    2. There is also one uniformed armed service person per 124 citizens, each of which costs their own salary in training and again in logistics and provisioning.

      1. And they have their own civilian bureaucracy, which lamentably does not appear to be affected by this order.

    3. Likely because there are 2.3 federally-funded boondoggles per citizen currently.

    4. First, only ~47% of US citizens have jobs

      So while it is 1 per 124 citizens it is 1 per ~58 workers

      Next, 35% is the peak marginal rate, however half of the workforce pays very close to $0 in Federal taxes with a net income tax rate of well under 5%

      So that puts it pretty close to 1 in ~37 or so actual tax payers.

      Next, just looking at Federal workers as Ron notes overlooks Federal contractors but it looks like there are at least 2 of them for every employee so that drops it to somewhere in the vicinity of 1 for every 10 or so private sector tax payers.

      Next add in the military, and now you are down to the vicinity of 8 private sector tax payers for every person who draws a paycheck either directly or indirectly from the Federal Government

      Finally all of that only covers about half of what the Federal government spends, the other half is paid out in welfare or entitlement benefits.

  3. . So notionally speaking, the federal civilian workforce including contracted employees would be, taking the lower estimate, somewhere around 7.7 million, or about 1 for every 42 citizens. Of course, the wages of contracted employees are not frozen.

    I simply refuse to believe that the federal workforce has “dropped dramatically” since 1966, so yes, the contract employee makes much more sense. I know several people who work in private companies– the entire company is essentially contracted to the federal government to manage this or that obscure program that you’ve never heard of.

    I just can’t believe that the federal government has decreased in size while increasing dramatically in scope- even with more efficient ways of stealing from its citizens.

    1. Anecdotally, one of the single largest technology groups in my company more than doubled last year to work as a major sub-contractor on some sort of VA project. I would like to believe that we are as productive for them as we are for our private clients, but I have heard that it is, um, “process intense”. I haven’t had any in-depth discussions with people who have been involved, but process intense usually means progress averse.

      1. Contractors are always bogged down in a mess of processes and reporting requirements. even a low-level web developer will have hours of admin-related paperwork to fill out each week. I spent many hours on risk analyses and status reports when I was a Fedgov contractor. I’d guess about 5 hours a week on admin paperwork for the Feds and for my company.

        1. It’s a painful spiral of pain.

          Person reads things like this, about all the waste in federal acquisitions work. Then someday they become a congressman, and can change the process to reduce waste, streamline things, and weed out the boondoggles! Inevitably, by adding more process, more reporting, and more meetings! Those new requirements get filtered through umpteen working groups, eventually get filtered down to the acquisitions workforce, and implemented, adding more reporting/process/reviews/etc. New person hears stories of federal “waste”. Cycle repeats.

          Just think of how much trouble you have every time your boss changes and the new boss feels the need to put their fingerprints on everything, and remember that happens to federal employees every two years.

          1. While I think there is a (massive) difference in character between government regulations of its own operations and government regulations of the private sector, I think it is fair to say that both have gotten out of hand. They also face similar problems. Nobody gets credit for rolling back acquisitions regs; they only get blamed when somebody else abuses the acquisitions process (whether it’s related or not).

    2. The biggest explanation for the apparent disparity is computers. While government IT is not a pinnacle of efficiency any more than government in general, whole swaths of paperwork jobs no longer exist. A computer and one employee today can do the work that it took multiple people to do in the past. The total workforce* may not have grown in absolute numbers but the allocation of labor is very different today.

      * = Not counting contractors, who in many cases really should be considered part of the workforce

      1. This.

        I assume most government employees in 1966 were doing some form of low-paying clerical work.

        What they, and the extra 200k federal workers are doing now is anyone’s guess.

      2. While government IT is not a pinnacle of efficiency any more than government in general, whole swaths of paperwork jobs no longer exist. A computer and one employee today can do the work that it took multiple people to do in the past.

        It’s certainly worth studying. For instance, through WWII, there were these things the federal government called “they typing pool”. Hell, they had them when I worked for a Federal contractor in 1987.

        Armies of ladies who ‘typed stuff’. However, in WWII there was no Federal Consumer Information Center whose broad mission included nifty recipes for diabetics..

        Every one of these new(is) programs require administering. So sure, the typing pool ladies may be long gone, but look at how many jobs have been created elsewhere?

        1. Looking at Gilmore’s graphs below, it looks like the number of non-defense employees has grown by about 25% since 2000 and total federal civilian employment has grown by about 17% since 2000. Meanwhile, the U.S. population increased by about 14% in that time frame.

          1. However, there’s a discrepancy between this graph which my above numbers are based on and OPM’s numbers.

            If both OPM’s numbers and the graph Gilmore posted are correct, then there is some sector of Federal civilian employment that’s lost about 500,000 people since 2010.

            1. *since 2000

    3. Don’t get distracted by the number of people who are on the federal payroll; look at the overall federal budget, and specifically the budgets for various programs.

    4. Makes sense considering the growth of the military-industrial complex – and it’s not just the big companies (Raytheon, Lockheed, etc.). There are layers – secondary contractors, sub contractors, etc. The big companies are generally considered systems integrators so they flow down requirements to smaller companies and just assemble what they built. It’s a perfect system for earmarked spending, hence the F-35 being built in 45 different states.

    5. Do the numbers include military? The military has shrunk considerably since 1966.

  4. So how many jobs might $500 billion create?

    A lot more if that money was untaxed and left in the economy that created it. But I’m not clear if that was the point.

    1. BP: You are correct. The rough estimate I cited was trying to figure out how many jobs $500 billion in stimulus spending – remember the stimulus – would generate. The estimate I cite is for illustrative purposes only.

    2. Not to mention the labor force that could be put to work producing products and services instead of consuming taxes as governmental overhead.

      1. Plus how much of this money is going to be taken off the top by “consultants”

  5. Some have argued that lots of services provided by government contractors should actually be moved into the federal government to achieve greater efficiencies.

    … only if the government’s core competency is funneling money into unions. Anyone who thinks government employees are efficient in any meaningful sense has not met one.

  6. According to the chart on that page, the total number of federal employees has been pretty steadily shrinking since the 1980s. I find that very hard to believe.

    1. Besides my above point that computers have eliminated a lot of labor-intensive work, a lot of contractors are essentially just easier-to-fire government employees.

      1. Yes. When I want to find out whether an organization’s cost to hire the next employee is too high, I look for contractors who are just doing the jobs of employees.

  7. The ghost of JD TooChilly moans and rattles its chains.

    Rabi Molla at the Wall Street Journal notes, “Nearly 1 in 6 jobs in the U.S. are working for the government, more than any single private industry.” The number actually peaked in 2009, then took a bit of a nosedive that caused panic?not in the streets, but in punditry hallways. But it’s rising again, largely because of state and local government hiring. By contrast, at the beginning of the 20th century, “one out of 24 workers was on a government payroll,” according to an economic paper published in 1949, with only 1 out of 15 taking goverment paychecks right after World War I.

    So, blips aside, the state has been a growth industry.

    1. Looks consistent with this post.

      1. Agreed. I didn’t post it as a counter, I just posted it as a verification that yes, while the number of non-contract federal employees has remained flat, the business of government ain’t getting smaller… at all.

        1. And that the feeling that the public sector workforce is growing isn’t wrong, it’s just happening more in local and state government. Which is probably more troubling, since they don’t have their own printing presses.

    2. To be fair, the did have ~117K fewer people hammering military checks post WW1.

    3. DP(P): According to the St. Louis Fed there are 152 million civilian employees. Assuming that figure includes the 22 million civilian government employees (fed, state & local) that would mean that my buddy Tuccille’s number is still correct. 152 – 22 = 130 / 22 = 5.9 jobs per 1 government job.

    4. Assume that 1/6 is not just federal (direct employees), but state, county and municipal employees.

      1. Yes, see my comment above. We’re arguing over who’s holding the whip and for which batch of lashes.

    5. Federal, state, and local governments spend roughly $8T a year. That’s 40% of the GDP, more or less. It’s also around $50K per year per family.

      Me, personally, I don’t care f that’s one super-rich government employee or 100 million poorly paid employees. It’s too damned high. Since everything devolves down to paying people, one way or another, that’s $8T going to people, and if the average job, including overhead, is $100K, that’s 80 million people depending on taxes for their paychecks.

  8. The Federal Government has been way to big since the New Deal.

  9. ” the number of federal civilian employees stands at around 2.7 million”

    That’s somewhere north of 2.6 million too many.

  10. This is a good thing regardless of alternative facts.

  11. If you are going to hire people better to be contractors without massive pensions

  12. not quibbling with anything ron says here; but the thing with headline numbers is that they usually mask more than they reveal.

    You can’t really make any statements about what they mean unless you have clarity on the underlying constituent parts. “essentially flat” can hide a lot of change.

    federal employees by agency/sector ( i think that’s accurate)… shows that defense (the largest group) is more than 1/3 of that total.

    and this shows that the “flat” numbers really cover a long term decline in defense staffing, and a steady rise in non-defense sectors.

    What do we really mean when we talk about “federal employees”? i don’t think most people think DoD. I think it would make more sense to simply look at the non-def employee trends overall and how this particular hiring-freeze decision affects the agencies with the highest growth in recent years. because those areas would reflect where the government is expanding its mandate.

    1. The DoD is up to 740,000 “civilian” employees according to Wikipedia. Not sure how many are officially federal employees, but that is a ridiculous number. More than the active duty Army And Marine Corps combined.

      1. Doesn’t the navy have more admirals than ships, or some such?

      2. Ron noted above that the total # of federal employees was ~2.7m

        1/3 of that is actually a bit higher than that 740,000 (more like 900,000)

        i’m not sure why you’re surprised. i’d think, given that national security is an entirely federal problem, that you’d expect a big chunk of people employed in that area. Should it be that high? maybe not. As noted their share of the total has been in decline since the 1970s.

        to me, its far more ridiculous that we employ 100,000+ people in the @(#*@ department of Agriculture… given that, as far as I can tell, none of them are actually farmers.

        1. I know what the Agriculture people do – they bug farmers.

          The problem is I can’t for the life of me understand what these DoD people do. They aren’t soldiers or sailors. Are they supposed to prevent cost overruns in weapons programs? Good one.

    2. There seems to be a discrepancy between your graphs and OPM’s numbers. For example, in 2010, the total number from the graphs is about 2.2 million but OPM says the total number of civilian employees in the executive branch in 2010 was almost 2.8 million. Where are the other ~600,000 civilian employees hiding?

  13. I hated my job so much I quit to go work for magazine for half the pay in New York City.

    And for half the articles.

  14. Reason for the next 4 years:

    This food is terrible – and such small portions!

  15. Mr. Bailey, was it wages or jobs that were frozen or both? In your article you state the following items:

    “President Donald Trump has signed an executive order freezing federal civilian workforce hiring.”
    “Of course, the wages of contracted employees are not frozen.”
    “Whatever the case for freezing federal employees wages, Spicer and the Trump administration have undermined it by offering up an “alternative fact” with regard to actual trends in the number of civilian federal government employment.”

    In the linked Washington Post article they do not mention wages at all so what do wages have to do with this freeze?

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