A few years ago—when I was on the Chinatown bus from Washington, D.C. to New York— I sat near a middle-aged man in a suit. He didn’t fit in with the regular Chinatown bus crowd, a mix of young professionals and students. Curious about the traveler’s story, I struck up a conversation. It turned out that the man had been laid off from a job on Wall Street, and afterwards he’d landed a government job in Washington, D.C. His family wanted to stay in Manhattan, so he divided his time between Washington and New York.
Due to the current financial crisis, we may see more people like the man on the Chinatown bus. In November 2008, New York State Comptroller Thomas DiNapoli said that the financial crisis could lead to the loss of about 225,000 private sector positions in New York State over the next two years. The securities industry in New York City has already lost upwards of 16,000 jobs, and another 38,000 jobs in the industry could disappear by October 2009. In addition, the city could shed another 10,000 jobs in insurance, real estate and banking. The cuts aren’t just in New York. Recently, JPMorgan Chase, Goldman Sachs, Morgan Stanley and Credit Suisse have announced that they’ll slash jobs globally. Corporations including Anheuser-Busch, Sony and Dow Chemical are also downsizing.
On the other hand, many federal agencies are hiring due to the economic downturn and the $700 billion bailout. In early 2008 the FDIC started signing on more bank examiners in anticipation of a rise in bank failures. A short-staffed FBI is investigating many of the firms at the center of the financial meltdown, including Fannie Mae and Lehman Brothers, for possible securities violations. In addition, the Department of the Treasury needs qualified people to help with the bailout. Even if the Treasury outsources a lot of the work, chances are it will need to hire at least 1,000 people.
According to a November 2008 article in the Wall Street Journal, the Treasury’s new Office of Financial Stability has been having a tough time finding qualified employees. As a result, the Office of Financial Stability, which has roughly 40 full-time workers, is operating with half the staff it needs. Neel Kashkari, a 35-year-old Wharton graduate who used to work as a Goldman Sachs banker, is in charge of the recently formed office. Kashkari wants to double the number of full-time employees at the Office of Financial Stability by January 2009.
The Office of Personnel Management has been working with the Treasury to expand the number of senior-level staff the department can hire. The Treasury hires a wide range of people, with various levels of experience and areas of knowledge, for departmental offices as well as its bureaus. The federal government posts jobs that are open to the public on its employment website, www.usajobs.gov.
Workers who’ve made the switch from the private to the public sector say there are some benefits to working for the government. The federal government often lets employees work flexible hours, and perks such as retirement and healthcare are good. The Federal Employee Health Benefits plan lets employees pick between medical plans including health maintenance organizations (HMOs) and preferred provider organizations (PPOs). Other benefits include life insurance, vision and dental coverage, flexible spending accounts and long-term care insurance.
There are lots of intangible benefits as well. Ira Peppercorn, a consultant who has been employed in both the public and private sectors, says, “You can go home at the end of the day and often feel you’ve done something really good.” Job security is another appealing aspect of working for Uncle Sam.
Of course, there are some downsides to working for the federal government. For starters, the pay isn’t as great as what you could make on Wall Street or at a Fortune 500 company. The highest possible salary for an FDIC bank examiner in 2007 was about $160,000, and wages for an employee in the Senior Executive Service top out at $191,300. In comparison, according to Vault.com’s salary surveys, a VP at now-defunct Bear Stearns earned $300,000 plus bonuses.
The culture of the government is also different than that of a Fortune 500 company or an investment bank. Federal employees work hard, but the pace isn’t as fast as in the private sector. Also, there can be a lot of red tape in the government. If you’re trying to go into the civil service, Peppercorn warns that the amount of bureaucracy to get a job is also greater than in the private sector. He advises, “Just be patient and persistent.”
Some people who leave the for-profit world to work in government later return to the private sector. Peppercorn has made the switch more than once. He worked in finance for the former chairman of a Fortune 500 company before joining the administration of Indiana politician Evan Bayh. After that, Peppercorn went back to finance. He subsequently worked for the Clinton administration as the Deputy Federal Housing Commissioner. Today Peppercorn has his own consulting business, Ira Peppercorn International. He explains, “I am a consultant in housing, finance, international development and long term recovery—so I have a foot in each sector.”