Recently many of my articles have focused on financial literacy. One of the key components of financial literacy is the knowledge of how to generate income whether it be through working a job, entrepreneurship, or wise investment of money already earned. With the government shutdown taking place, quite a few federal employees have been forced to ponder one of the key considerations of working a job; security.
“When we were in college, the government was thought to be the place to be in terms of employment. A lot of people wanted to get in,” a close friend who is also a federal employee and a mother of two with a third on the way said when recently treating me to lunch. “Now things are really different and there is so much uncertainty. People are rethinking whether or not they want to go in or even stay in the government.”
In a booming economy with plentiful tax revenues, a robust gross domestic product (GDP), and when our elected officials are getting along, yes being a federal employee can be a good way to go, so much so that some would say that government employees are treated too well. Prior to 2008, it was thought to be stable and federal employees were thought to be relatively safe from the ups and downs of our economy.
On a side note, it has been said that it is hard to fire federal employees and there are some in our ranks who have lost their desire to produce at their jobs and are getting paid to do nothing. In that regard maybe some federal employees are treated too well.
When the country is in a recession and our elected officials can’t agree on how to best fund the government, or even to fund it at all, being a federal employee can look a lot less attractive. It is then that you (as have many) realize that you are still at the mercy of someone else; in this case our politicians who interestingly continue to get paid no matter what.
My tenure as a federal employee started in 2008 at the end of George W. Bush’s second term just as the current economic downturn ramped up. Though having a steady income while other sectors of the economy were disintegrating around us, federal employees have experienced/ endured:
• A freeze of our annual Cost of Living Adjustment (COLA)
• The uncertainty of Continuing Resolutions instead having concrete Budgets
• The 2011 standoff over the raising of the Debt Ceiling and the Fiscal Cliff
• The 2013 summer Sequestration leading to furloughs
• Now the 2013 Government Shutdown over Obamacare and a second showdown over the raising of the Debt Ceiling compliments of the Tea Party
This series of unfortunate events has shown that federal employees are just as vulnerable to the same economic calamities as everyone else when a perfect storm like the one that we’re currently in has set in. It has shown that federal employees are at the mercy of quarreling elected officials. These events have in fact shown that whether you’re employed by the private sector, the government, or an entrepreneur, everyone is vulnerable to something. There is no such thing as 100% job security and everyone is expendable to some degree.
Lastly though it hasn’t taken place during my tenure, there is also something call a Reduction in Force (RIF) in the government where the size of the workforce needs to be reduced and federal employees are retained or let go based upon seniority and experience. This is another way for federal employees to lose their jobs.
No matter what sector of employment or business you’re in, it is once again important to not live paycheck to paycheck if you can help it, and to have some money saved up for unknown hardships such as this shutdown. In his Financial Peace University, Dave Ramsey calls that having an emergency fund, or GOK (God Only Knows) fund.