![By Beyond My Ken (Own work) [GFDL or CC-BY-SA-3.0-2.5-2.0-1.0], via Wikimedia Commons](https://livingrichcheaply.com/wp-content/uploads/2013/08/100_Centre_Street_Criminal_Courts_Building.jpg)
By Beyond My Ken (Own work) [GFDL or CC-BY-SA-3.0-2.5-2.0-1.0], via Wikimedia Commons
I wrote in my last post that my wife was hired for a job in a state agency. I am also a New York State employee. When I graduated from college, my first job was with a federal agency: Social Security. So I’ve worked in the public sector all my life, not including summer jobs during college and in high school. For anyone who is contemplating going into the public sector, read on for the good and bad sides of working there. Of course, these are generalizations as the public sector includes a wide variety of jobs in many different fields. I will focus more on federal job benefits as not everyone is from New York.
The Pros
Pension:
Many people lament the days when most companies had a pension. They like the security of a pension plan where the payout is guaranteed. For the majority of federal employees, if they have 20 years of service and are under 62 years old, their pension will be 1 percent of their high 3 year average salary. So if the average of your 3 highest years of salary comes out to $50,000, and you have worked 30 years, you will receive a pension of $15,000. Many states offer much more lucrative pension plans. However, that is a risk that the pension fund will become insolvent. Look at Detroit.
Benefits:
The pension is a the biggest benefit as mentioned above. Federal employees also have the ability to contribute to the Thrift Savings Plan (TSP) which is the federal government’s version of the 401K. The employer automatically contribute 1% per employee and match contributions up to 5% (dollar for dollar the first 3% and 50 cents to the dollar the fourth and fifth percent). Public sector jobs also generally have excellent health care plans that include vision and dental.
Security:
Recently, there have been some layoffs and furloughs, but for the most part the jobs are pretty stable, especially compared to a job in the private sector. Also, where a private company might go out of business, that won’t happen to the federal government. If it did, we might have bigger problems to contend with.
Work/Life Balance:
There is a possibility of flexible schedules and there is a good amount of annual/sick leave as well as holidays that many in the private sector don’t get: Columbus Day, Veteran’s Day, President’s Day (I actually get Lincoln’s Birthday and Washington’s Birthday off!). There are usually set hours with very little mandatory overtime. There is sometimes voluntary overtime which many employees actually love because they get paid more for it.
Cons
Possible lower salary:
I’ve heard many public sector workers say that they have lower salaries than their private sector friends, but I don’t necessarily find that to be true, especially when you take into account the entire compensation package. However, the potential for a high income is probably limited. As people often say, you can’t get rich by working in the government. But I do think you can do very well for yourself.
Advancement Opportunities:
If you are talented, motivated and great at what you do, it may be frustrating as promotions often have to do with seniority. While this is not always true, it is more difficult to move up the ranks quickly compared to the private sector. In state agencies, there are often civil service exams you have to take to get a promotion.
Lack of incentives:
Unlike in the private sector, you don’t go and ask for a raise because you’ve been doing a great job. Pay raises generally follow a pay schedule. In the federal government, employees get a cost of living adjustment each year. There are no bonuses, profit-sharing or stock options in the public sector. Although, I did once get a merit award while working at the SSA in the amount of $700.
Bureaucracy:
One of the pros was that it is hard for a public sector worker to be laid off or fired, but it can also be a con as you may have to deal with incompetent and lazy employees who can’t be fired. Also, innovation and getting things quickly does not happen often in government as there is red tape for employees as well and things often have to go through multiple people before it gets approved.
If you are interested in applying for a public sector job in the federal government, click here.
For New York State public sector jobs, click here.
For New York City public sector jobs, click here.
Are there any other pros and cons that you can think of? Has anyone had experience working in both sectors?
So where do I sign up? Ha! Here in Canada, I would say a lot of the public jobs, aren’t as stable as they used to be, but the benefits and pay is good. Because they’re public, they have to list salaries on any job postings, and they seem a bit higher than the private sector (either that, or I’m not looking hard enough). I can see bureaucracy as being one of the bigger cons. There’s lots of that in the private sector too, but nothing’s worse than working with people who feel entitled to their job.
I think it’s true here too, the public sector jobs are not as stable as they use to be. And of course these are just generalities…there is plenty of nepotism and unqualified people in high positions in the private sector too.
What always seems to strike me about public sector jobs is how it seems impossible to get fired.
I know this because of the incompetence I regularly encounter with public sector employees.
Present company excluded of course!
No Waste recently posted…How To Lower Your Alexa Ranking
Hahaha..thanks! Yes, I don’t think it’s fair that it is so hard to get fired. One really good (or bad) example of this is the “rubber room” for teachers in NYC who have been accused of some type of wrong doing…they get paid to do NOTHING awaiting a hearing. http://www.huffingtonpost.com/2012/10/16/rubber-rooms-in-new-york-city-22-million_n_1969749.html
I am from Ohio and I have a good friend who does road maintenance working for the state. After they reach a certain amount of years and retire they continue to receive a check for 75% of what they were making before they retired for the rest of their life. On top of that they have TONS of sick and vacation days, The salary is one of the bests you’ll find in my area as well.
Alexa recently posted…How a Single Mom of Four Gets Out of Debt
Wow 75%! That is a lot! Good salary, great pension and plenty of days off…can’t beat that.
My mom worked for the county and most of this sounds accurate to what she experienced! As the jobs are unionized, it can be really difficult to fire people, even those slackers who deserve it. My mom had one particular coworker that insisted she had put her time in (5 years ago) and proceeded to do the bare minimum. She’s at least planning to retire at the end of the year.
I think the benefits and pension make up for the lower salaries. You get a lot of perks, and sometimes those help to keep you sane (especially all the time off). My mom never had to work overtime unless they needed help on a Saturday where someone took off. I was always envious. When my mom went to retire, they said they have been busy processing a lot of retirements (baby boomers) so I am hoping more openings will become available.
E.M. recently posted…My Plans for a Frugal Vacation
Really 5 years is “putting in her time!” Slackers definitely annoy me, especially when other employees have to pick up the slack. I’ve heard that there are a lot of retirements due to baby boomers…I guess that means more promotions! I would say more vacancies, and they may be some more, but I think because of the budget issues, they’re not hiring as much. The day side to that means more work.
Here in Romania, working in the public sector is not that good: pay is extremely low (one of my friends got an entry public sector job and for 8 hours per day he received about $150 per month, in Romania the average wage being about $500). Of course, you can’t compare Romania or many other countries otherwise with the US where working in the public sector clearly has some nice benefits.
C. the Romanian recently posted…20 Reasons Why I Won’t Lend Money to a Friend (Anymore)
Yea I’m sure it is different in Romania. Does your friend at least get good benefits?
I work in public now and definitely appreciate it for all your pros (though do agree with the cons), especially with job stability after being laid off from a previous corporate job. I also like it since it’s a sector I believe in, whereas I just felt like a widget in corporate. Great points!
anna recently posted…Wedding Update #643
Thanks! That’s good that you believe in the sector you work in…whether it is the private or public sector, that’s probably a pretty important element in job satisfaction.
We have one of the highest state workers ratio per capita in the country. Everyone has a cousin or auntie working for the state. I know a lof of them, if they had to work in the private sector that wouldn’t last a week. I’m not to judge because when I get burned out from my job if i can work for the state i totally will become a clog in the system.
Really I didn’t know that about Hawaii.
I was a public employee for eight years and enjoyed my time there (California State University System), and I think you’ve done a good job summarizing the pros and cons. I wouldn’t trade that time for anything as I really enjoyed working in the University system, but I don’t think I would go back now. My personality fits in better in the private sector, where good and bad performance is noticed and (often) has appropriate consequences. As an extrovert, I need the carrot and the stick…I found myself coasting in the public sector.
The benefits are pretty sweet though. I remember never paying anything for insurance and forking over something ridiculous, like a $5 copay. People got upset when they jacked it to $10 (a 100$ increase!).
Done by Forty recently posted…Football, Persistence, and Television Failure
I agree with you that that is one of the biggest cons…that good and bad performance doesn’t necessarily have appropriate consequences. And it drives me nuts when people that have an amazing benefit…$5 copay (wow!) complain when it is jacked up to $10 which is still amazing.
I have a few friends that have public jobs and while some love what they do other just do it for the benefits like the pension and days off. It really sucks for my friends as they say they get stuck with work or backed up because a lot of people don’t do their jobs well and know nothing will be done. I never worked for the public sector but sounds like a good option for some people.
Thomas | Your Daily Finance recently posted…Are You Trapped in the Credit Conundrum
I think it is definitely good for my wife and I now that we have a baby. The work/life balance and benefits are great for those with a family.
I’ve never worked in the public sector, but I imagine that a lot of the bureaucracy and rigidity would be frustrating for me. But I think it’s the same in a lot of big private corporations. I would love to have access to the TSP.
Matt Becker recently posted…The Real Risk of Investing in the Stock Market
That is true…big private corporations are not immune to some of the same “cons” as the public sector. I still have some money in the TSP, I never rolled it over because it is so great. I think their fees/expenses are even lower than Vanguards already low index fund expenses.
The job I just left was with a Medicaid carrier, so although not a government job, it was very close because we dealt with a government agency so close.
You are very right that when you combine the generous benefits of a public sector job, they are very competitive with private sector income. The security is also huge.
If it wasn’t for the lack of career growth, my public sector-like job would have been perfect. I think if I was further in my career, I would have stayed there until retirement.
Greg @ Thriftgenuity.com recently posted…Combatting Lifestyle Inflation
That’s true, when you’re young you’re more likely to look for a job that has more potential and more mobility. But once you have a family, the work life balance and security…and pension is more important.
If you have student loans there are HUGE advantages to working public sector!
Michael | The Student Loan Sherpa recently posted…The College Survival Guide
Oh yes the student loan forgiveness program right.
Yeah it is very much true that you can find many lazy and incompetent people working in public sector. People who wants security like pension and more benefits stick to them and career oriented people just move onto private sectors
Rita P recently posted…Become rich now or never
I think that is the stereotype and while it is true sometimes, I don’t necessarily agree that there is no place for career oriented people in the public sector.
I think typically it’s seen as trading security for more money. I think that’s a pretty fair deal in most cases. Man, I’d sure love to have a pension!
Pretired Nick recently posted…Tame your housing costs to ensure a safe pretirement
Yes, the pension is great, though it can be a bit of a “golden handcuff.”
I haven’t worked for public sector but grass is greener on other side, I knew that there are good benefits working for public sector, I liked the way you have highlighted all the cons along with pros. I think I am better with private sector as I want to improvise based on the performance so it suits me. It depends on person to person and I agree that for your wife especially after the baby it is the best choice, may be later once kids are younger she can move to private sector after few years.
Rita P @ Digital Spikes recently posted…Become rich now or never
Thanks. I definitely agree that some people are more suited for the private sector. My wife probably would like to teach…maybe she’ll open for own preschool. Although I would say as I mentioned to Pretired Nick…that pension is a “golden handcuff.” It is such a great benefit that you don’t want to leave it…but we’ll see, you never know what the future holds.
The government sector is one of the last labor union strongholds. The average employee has better benefits, salary, job security, and retirement income when compared to private industry.
The poor economy hit the private workers harder and widened the gap. The funny thing is most government workers don’t seem to appreciate what they have.
Kevin @ Growing Family Benefits recently posted…Why do You Need Maternity Insurance?
I agree Kevin, many government workers don’t appreciate all the benefits and often complain about their salary. I don’t agree with them on many of those issues. Thanks for stopping by.
I would have trouble with the lack of incentives piece. I like the idea of getting a little extra if I go above and beyond my job duties.
DC @ Young Adult Money recently posted…5 of My Small Business and Website Failures
That is definitely one of the downsides. Hopefully, they work to give more incentives and motivation to those who go above and beyond their duties.
I was very close to joining the Commissioned Corps and working for the Indian Health Service. I liked the benefits and difficulty of the patients, but ultimately, i decided not to live out in the middle of the reservation, where the job was at the time. I think one huge appeal is being able to retire young and then start a new career while drawing the pension. My husband is a teacher, so I guess he will be able to do that in a few years if he wants.
Kim@Eyesonthedollar recently posted…Student Loan Money-Don’t Use It To Buy an Iguana
That sounds like an interesting job, but, yea I don’t know if I’d want to move out into the middle of a reservation. As a teacher, I’m sure your husband probably has good benefits now too. Does he plan on taking the pension and starting a different career?
My brother in law got a job last year with the public sector and he’s SO happy to be in a secure job that pays him well. Rick has a job that I would say is comparable to a public sector job, in that it’s pretty darn secure and the pay/benefits are very nice compared to a lot of other companies. IMHO, it’s the next best thing to a public sector job, and we are very grateful for it.
Laurie @thefrugalfarmer recently posted…Is Your Air Conditioner on Your Side Against Debt?
The security is a big deal especially with the tumultuous economy we have. Glad to hear that your husband has a secure job with good benefits.
Will never ever understand the mentality in State Agencies. Never. MEAN…………..