A new job turnover study released yesterday by the Congressional Budget Office disputes some administration assumptions about the government's low "quit rate." Administration officials have been saying that civil servants tend to stay on the job because they know they cannot get better pay and benefits by going into the private sector.
CBO's study indicates that the administration may have improperly compared turnover rates in industry with those in government by failing to consider the higher average age of the civil service (which, it said, produces job stability) and the thousands of government workers who transfer from one agency to another each year.
CBO's report, prepared for Budget Committee Chairman William Gray III (D-Pa.) and Rep. Vic Fazio (D-Calif.) says that when work force age and transfers are considered, the civil service job turnover rate is only about two percentage points lower than industry's.
Two years ago, prompted by the Grace Commission (the President's Private Sector Survey on Cost Controls), the administration proposed freezing or reducing pay raises over the next few years until government turnover rates approach those in industry. Last year the president's budget called for a 5 percent federal pay cut.
Administration officials said at the time that turnover in industry was two to three times higher than in the civil service. And they said that proved that government pay and retirement benefits were superior to those in the private market.
Administration data showed that nearly 12 of every 100 private-sector workers quit their jobs each year, compared with fewer than five of every 100 civil servants.
But CBO said that such matchups don't take into account the fact that younger employes and clerical workers (in government and industry) have a higher turnover rate than older employes and those in nonclerical jobs.
CBO said that 65 percent of the federal work force is at least 36 years old. In industry, CBO said, 51 percent of the employes are 36 or older.
Also, CBO said, the government retirement system, with its generally better payout for long service compared with industry, provides a "particularly strong incentive to stay and collect." The system gives little or no pension benefits to short-service workers, CBO noted. Private-sector workers under Social Security and those in some pension plans have more freedom to move about without losing benefits, CBO said.
CBO also noted that when private-sector workers transfer to similar jobs in other companies, it is counted as a "quit."
But government quit rates don't count employes who move -- often to get promotions or better jobs -- to other agencies. The administration said it didn't count such transfers because employes remained with the same employer, getting the same benefits and under the same pay system.
If the age of the white-collar civil service work force and agency-to-agency transfers were taken into account, CBO said, the government quit rate would appear to be 8.8 percent or 2.1 percentage points higher than industry.