It could cost the American taxpayer $18,000 for each federal worker who is fired this summer. Federal agencies here and around the nation are preparing to lay off nearly 15,000 bureaucrats to comply with "economy" directives from the White House and Congress.
Although the Reagan administration and Congress are big on body counts that trumpet the number of feds heading for unemployment lines, seems like nobody has checked out what it costs to fire a federal worker -- or to force one to retire early. The simple answer is that it costs a lot. -
In metro Washington, where the average white collar civil servant earns in excess of $23,000 and where approximately 4,500 people are due to be laid off, the tab could easily be $81 million. That will come out of agency budgets, for the most part, but agency budgets come out of tax dollars.
The nationwide bill for this year's RIFs, if one includes severance pay, allowances, lump sum payments for vacation time and the like, could hit $252 million. Just for firing people.
Many federal workers faced with a layoff will take early retirement. Although their annuities will be reduced for each year they are under age 55, their early retirement would add heavy, long-lasting extra costs to the federal retirement program that is paid for by workers, and taxpayers. Any way you slice it, firing people is expensive.
Under severance rules, a worker fired for economy reasons gets one week's salary for each of the first 10 years of service. The fired worker gets two weeks' pay for each year of service in excess of 10 years. On top of that, employes who are over 40 when they are fired get another allowance because of their age.
Suppose an employe age 45, earning $400 a week (just over $20,000 a year), gets fired. That employe would be entitled to severance, under the formula, of about $18,000. In addition, the employe might choose to withdraw his or her contributions to the civil service retirement fund -- that could total several thousand dollars at 7 percent of salary for each year of service. In addition, the government would be obliged to pay the employe for unused annual leave (vacation) time, which could be equal to as much as one month's salary. The bill adds up.
Nonmonetary costs of a RIF include the disruption to agencies when workers spend a lot of time worrying about their status, and the effect of "bumping" when senior workers and veterans displace less senior employes. It is possible that a $25,000-per-year employe could bump down several grades, displace a lower-paid worker and take his or her job but keep his original salary under the so-called saved pay law, for two years. That can make for some very high-paid (and not necessarily good) typists.
Phony Figures? The president of the largest federal union, the 300,000 member American Federation of Government Employees, says the Reagan administration is downplaying the real impact of the upcoming RIF's so as not to demoralize the bureaucracy and keep workers from sandbagging programs. Kenneth Blaylock, who is also a member of the AFL-CIO executive council, believes that many federal agencies, on orders of the White House, downplayed the number of workers to be fired in their report to the Government Service Task Force. The House-Senate unit, headed by Maryland Democrat Mike Barnes, reported last week that, based on data given it by agencies, 4,455 Washington-area feds are due to be laid off this summer.
Blaylock says his union has information that the RIF's and layoffs will cut much deeper. AFGE and other big unions, the National Treasury Employees Union, National Federation of Federal Employees and National Association of Government Employees, are lobbying Capitol Hill to get planned program (and job) cuts restored.
Unless the federal job picture improves by Oct. 1, Blaylock says he will hold a nationwide what-do-we-now vote of his membership. One of the questions on the ballot will be whether to take a "job action." That is a code word federal unions use when they mean strike or slowdown, both of which are illegal, but not impossible in government.
How come economy drives are always so expensive?