Financial Times: Effort to cut federal workforce takes aim at key US jobs engine

[Dennis Donovan]

Financial Times - (archived: https://archive.ph/NdTHo ) Effort to cut federal workforce takes aim at key US jobs engine

Government and healthcare have emerged as biggest source of American employment, particularly for knowledge workers

Taylor Nicole Rogers in New York 28 minutes ago

Elon Musk’s plan to slash the federal workforce under Donald Trump is poised to upend one of the strongest engines of the US labour market: the government.

Government and healthcare jobs have been the biggest source of employment in the past year, particularly for knowledge workers, data shows. US job recruiters, economists and labour leaders fear the plan to cut the workforce could crimp the number of good available jobs at a time of declining private-sector employment, compounding already-stiff competition for white-collar jobs.

“We’re getting closer to where we are not creating as many jobs as we need to keep up with the population,” said Cory Stahle, an economist at jobs site Indeed. With fewer federal openings, “we start entering a territory where [the labour market] starts to get a little bit sketchier”.

Excluding the Postal Service, the federal government created 2,100 jobs in October. Total payrolls grew by only 12,000 workers that month, according to the labour department, as private sector payrolls were damped by strikes and Hurricanes Helene and Milton. 

The federal government employs just 2 per cent of the US workforce but has been among the largest creators of white-collar jobs in recent years. The jobs of its 3mn civilian employees range from law enforcement officers at airports and prisons to medical providers to postal workers.

The popularity of government work has exploded as workers, particularly younger ones, seek out stability after headline-grabbing lay-offs in tech and on Wall Street. Handshake, a US jobs site targeting college students and recent graduates, reported applications to federal government jobs grew 55 per cent last year. Others are after robust healthcare and retirement benefits, said Andy Challenger of outplacement firm Challenger, Gray and Christmas. 

/snip

[bucolic_frolic]

1. The Trump Depression will be epic

Everything is nosebleed high with no place to go but down and incompetence will accelerate the fall.

[Strelnikov_]

3. Yep

Things are about to get real.

[mopinko]

2. the aca created a ton of good jobs.

we dont talk about that enough.

[Strelnikov_]

4. This carries over to State and local govt employment

There are many positions, in State and local, that depend on Federal funding. Environmental protection, Emergency management.

Also, the loss of Federal ‘pooled’ resources. USDA, USGS, etc

[intheflow]

6. Libraries rely on Federal funding.

I’m pretty worried for my system in an impoverished city.

[modrepub]

5. A Couple Of Comments

First, whatever money they think they will save on salaries will have to be counted against what it will cost to terminate. People will still have leave balances that are typically paid out upon termination. Workers with long work histories may have quite a bit of leave to be paid out. If these ghouls have any sympathy then severences will be needed. Both of these would count against any potential savings.

Second, if you fire someone then you owe unemployment compensation to anyone who qualifies. That will be a drag on the economy. Unemployment increases are a double whammy. You loose tax revenue and you have to pay out unemployment compensation.

Third, you have to hope the pin heads who are going to do the firing do it right. If not, there are going to be a lot of legal expenses that will have to be paid out.

Fourth, I hope someone tracks just where these positions are being eliminated. If more blue states than red take a hit then you know this is all politically motivated.

Fifth, someone better track if work done from these eliminated positions isn't just transferred to more expensive (and politically connected) private sector jobs.

[intheflow]

7. This should be its own OP. n/t