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This Congressional Budget Office (CBO) report is the latest in a series on trends in federal employment, updating information from earlier documents. It responds to inquiries from the Congress about changes in federal employment.

R. Mark Musell of CBO's Microeconomic and Financial Studies Division prepared the analysis under the supervision of Roger Hitchner and Marvin Phaup. Staff at the Office of Personnel Management and the Bureau of Labor Statistics provided data.

Christine Bogusz edited the paper, and John Skeen proofread it. Rae Wiseman prepared the paper for final publication with help from Kathryn Quattrone, and Lenny Skutnik produced the printed copies. Annette Kalicki prepared the electronic versions for CBO's Web site.

Dan L. Crippen
Director
May 2001
 
 

INTRODUCTION AND SUMMARY

• Changes in Civilian Employment by Branch of Government and Agency
• Changes in Full-Time Civilian Employment by Geographic Area
• Other Trends in Federal Employment

APPENDIX: THE FEDERAL CIVILIAN WORKFORCE
 

TABLES
1.	Changes in Federal Civilian Employment by Branch, 1985-2000
2.	Changes in Federal Civilian Employment by Region and State, 1985-1999
3.	Occupational Distribution and Educational Attainment of Federal Workers, 1985 and 2000
A-1.	Number of Federal Civilian Workers, Fiscal Years 1985-2000
FIGURES
1.	Defense and Non-Defense Federal Civilian Employment, 1985-2000
2.	Age Distribution of Federal Civilian Employees, 1985 and 2000
BOX
1.	Counting Federal Employees

 

INTRODUCTION AND SUMMARY

From 1985 through 2000, the period covered in this analysis, the federal government experienced a net decrease of about 430,000 civilian workers, or 19 percent--the total fell from 2.3 million workers to 1.8 million. Those figures exclude the 170,000 temporary employees hired for the 2000 decennial census. However, even when those employees are taken into account, data still show a decrease in employment over the 15-year period of about 260,000, or 11 percent of the workforce. (See Tables 1 and A-1; also see Box 1 for a discussion of measuring the size of the federal workforce.) Although the number of employees at most agencies fell over the period, by far the largest decreases occurred at the Department of Defense (DoD).
 

The budget submitted by President Bush for 2002 projects fairly steady federal employment overall. Within that framework, however, the President's budget emphasizes streamlining programs, reducing layers of management, and making federal employees and services more accessible to citizens.
 

CHANGES IN CIVILIAN EMPLOYMENT BY BRANCH OF GOVERNMENT AND AGENCY

Civilian employment in the legislative and executive branches remained fairly stable throughout the late 1980s and early 1990s (notwithstanding the temporary jump in executive branch employment for the decennial census in 1990) and declined thereafter (see Table 1). Of the three branches of government, only the judicial branch experienced an increase in employment over the 1985-2000 period. In fact, increases in employment among those parts of government involved in the administration of justice make up the most significant exception to an otherwise general decline in federal employment.⁽¹⁾

Department of Defense

Civilian employees at DoD support U.S. defense capabilities. Reductions in the number of those workers account for most of the downward employment trend for government (see Figure 1). Employment at DoD started to fall in the late 1980s and has continued to slide since then. Most of those reductions in workforce reflect the changes in national security requirements that took place after the dissolution of the Soviet Union and the end of the Cold War. Those changes have led to reduced budgets, smaller military forces, and, consequently, less need for civilian personnel to support defense activities. Overall, employment at DoD fell by 399,000, or 37 percent, over the 1985-2000 period.
 

FIGURE 1. DEFENSE AND NON-DEFENSE FEDERAL CIVILIAN EMPLOYMENT, 1985-2000

SOURCE: Congressional Budget Office using data from the Office of Personnel Management.

NOTE: Totals are averages of monthly employment counts. Data cover all branches of government, but not the U.S. Postal Service. All work schedules and geographic areas are represented. The jump in non-Defense employment in 1990 and 2000 is attributable to temporary hiring for the decennial census.

Civilian Agencies

Taken as a whole, employment among civilian agencies was higher--by about 140,000 people--in 2000 than in 1985. (All agencies other than the Department of Defense are designated as civilian agencies in this report.) That increase, however, is all attributable to the Commerce Department's temporary hires for the 2000 census. If those temporary workers are excluded, employment among civilian agencies actually dropped--by 30,000, or about 2.5 percent.

Within the overall change, trends among civilian agencies varied. Some agencies employed more people in 2000 than they did in 1985, and some employed fewer. For civilian agencies in which employment was lower in 2000 than in 1985, decreases in staff generally started in the early 1990s but did not reach the magnitude of the cuts at DoD. However, there are exceptions. For example, employment at the Office of Personnel Management fell by 45 percent over the 1985-2000 period, exceeding even the percentage reduction at DoD. Among the government's larger civilian agencies, the number of workers decreased significantly at the General Services Administration (GSA), falling by 13,500, or 49 percent; at the Department of Agriculture, falling by 15,500, or 13 percent; and at the Department of Veterans Affairs, falling by 26,300, or 11 percent.

In contrast with reductions at DoD, drops in civilian agency employment have had less to do with decreases in workload and more to do with tight budgets and efforts to improve program management. The decline in employment at the Department of Health and Human Services, for example, can be traced to budgetary constraints and efforts to computerize aspects of the Social Security program. The drop at GSA partly reflects the transfer of some functions to other agencies. A shift in activities from government agencies to private contractors also likely contributed to some decreases in employment at civilian agencies.

The only major agency to show continuous growth in employment from 1985 to 2000 is the Department of Justice. The agency's expanded efforts to fight drug-related and other crime have resulted in a near doubling of workers--increasing from 62,900 to 125,300--over the 15-year period. For similar reasons, employment at the Department of the Treasury climbed by 16,200, or 12 percent.
 

CHANGES IN FULL-TIME CIVILIAN EMPLOYMENT BY GEOGRAPHIC AREA

About 19 percent of all full-time employees of the U.S. government work in the Washington, D.C., metropolitan area; the rest of the federal civilian workforce is scattered around the country. In the same way, reductions in federal employment have been spread across the country, with almost all states experiencing some reduction. The greatest number of reductions occurred in the eastern United States, however, the region that accounts for almost half of all federal civilian employment (see Table 2). Decreases in employment were not significant compared with overall state employment, although such comparisons probably understate the impact for particular localities.
 

OTHER TRENDS IN FEDERAL EMPLOYMENT

In addition to shrinking in size since 1985, the federal workforce has become more white-collar, older, and more concentrated in highly skilled occupations. Of those changes, the aging of the federal workforce has been the most notable.

The Aging of the Federal Workforce

In 1985, about 25 percent of the federal workforce was over age 50. As of December 2000, the comparable figure was almost 40 percent. Nearly three-quarters of the federal workforce is over age 40 (see Figure 2). In contrast, only about half of all employed workers in the United States are over that age.
 

FIGURE 2. AGE DISTRIBUTION OF FEDERAL CIVILIAN EMPLOYEES, 1985 AND 2000

SOURCE: Congressional Budget Office using data from the Office of Personnel Management.

NOTE: Data cover full-time employees of the executive branch.

If the federal government continues its recent efforts to limit employment, the aging of the workforce will likely continue. Eventually, agencies could face significant challenges replacing experienced, skilled staff as more workers become eligible for retirement. According to the Office of Personnel Management, almost one-third of federal civilian employees will be eligible to retire from federal service by 2005. Agencies with workforces older than average may face some of the greatest challenges. At the Department of Housing and Urban Development, for example, nearly half of the workers are over age 50. But the aging of the workforce could prove beneficial in some ways. Pending retirements could provide agencies with the opportunity to reduce employment where needed and to reshape the remaining workforce to meet demands for better performance under the Government Performance and Results Act and other management improvement initiatives.

The General Accounting Office (GAO) has urged agencies to prepare for potential problems posed by the aging of the workforce. Among other things, GAO recently recommended more effective recruitment and retention, more succession planning, and more investment in the training and development of existing staff.⁽²⁾

Changes in Occupational Distribution and Educational Attainment

Most reductions in federal civilian employment have occurred among positions the government designates as blue-collar, such as carpenter, and white-collar clerical, such as secretary. In 1985, employees in blue-collar occupations totaled about 400,000; by 2000, employment in such jobs had fallen to roughly half that level. Over the same period, employment in less-skilled, white-collar, mostly clerical jobs dropped to approximately 135,500 from about 377,400. In contrast, employment in occupations that the government designates as professional, administrative, or technical generally rose from 1985 to 2000. Examples of those positions include attorney, personnel director, engineer, and computer operator.

As the pattern of changes in occupational distribution suggests, federal civilian workers today are more highly skilled and educated than those of 1985, and more are white-collar. About 79 percent of the federal civilian workforce held jobs in white-collar occupations in 1985, and about 40 percent of all jobs were designated as professional or administrative (see Table 3). By 2000, those percentages had grown to 87 percent and 56 percent, respectively. At the same time, the portion of the civilian workforce with advanced degrees has also risen. In 1985, 30 percent of the federal civilian workforce had a bachelor's or higher degree; by 2000, the figure stood at 40 percent.
 

Mirroring the trends described above, more of the white-collar workforce holds jobs assigned high grades on the government's pay schedule. In the federal pay system, most white-collar workers are paid according to the General Schedule, a pay structure of 15 grades. Job levels are based primarily on duties and responsibilities, with the highest-paid jobs designated grade 15 and the lowest jobs grade 1. In 1985, about 39 percent of the white-collar workforce held jobs at grade 11 or higher; by 2000, that figure had grown to more than 50 percent.

A number of factors have contributed to the shift in federal employment toward professional and administrative positions in higher grades, although it is difficult to isolate each factor's precise contribution. Certainly, cutbacks in defense help explain the large reductions in the number of blue-collar workers. Traditionally, the Department of Defense has been the government's largest employer of those workers.

The loss of other less-skilled jobs may be an indication of the government's efforts to improve the efficiency and effectiveness of its operations. Many of the management improvements proposed for government over the years, such as automation and turning operations over to private firms, apply most appropriately to, and allow for reduction in, lower-skilled work.

Although management improvement efforts may reduce lower-level positions, they may also increase the demand for highly trained personnel. For example, contracting out to private firms, which often shifts lower-skilled work into the private sector, may increase the role in government for well-trained professionals to prepare and monitor contracts. Computerization and the rise of the Internet have also increased jobs in government for technically trained personnel. In addition, the National Performance Review and other government management reforms have encouraged agencies to make fuller use of automation and the Internet.
 

APPENDIX: THE FEDERAL CIVILIAN WORKFORCE

This appendix table shows federal civilian employment by branch of government and agency for each year from 1985 through 2000. It has a separate section that compares employment levels at the Department of Defense and at non-Department of Defense agencies. The last section of the table provides information on employment totals excluding and including the U.S. Postal Service.
 

1. The increase in employment for justice-related activities has been accompanied by an increase in spending. For a discussion, see Congressional Budget Office, Trends in Federal Spending for the Administration of Justice, CBO Memorandum (August 1996).

2. General Accounting Office, High-Risk Series: An Update, GAO-01-263 (January 2001), pp. 71-96.