February 2023
Facing Financial Insecurity
Survey Finds Federal Workers Struggling with Money
A new report provides a benchmark analysis of the state and local workforce’s financial health, and the findings suggest that many public sector workers are on shaky financial footing at the moment.
Conducted by MissionSquare Research Institute, Examining the Financial Wellbeing of the U.S. Public Service Workforce assessed the financial health, benefits and savings of public employees, based on a range of data sets. Overall, the study uncovered a significant share of public employees facing financial difficulties.
For example, close to one-fifth of all public employees reported skipping healthcare because they could not afford it. Some public service workers reported being unable to pay all of their bills. From 2017 through 2019, 14% of all households employed in the public sector indicated that they could not pay all their bills, according to the report.
A fair number of public sector workers don’t have enough savings on hand to address a substantial emergency, either. The survey saw nearly one in three public employee households saying they would have trouble coming up with $400 for an emergency event. Emergency savings were less common among single women, Black, and Hispanic public employees.
“Financial insecurity is a growing problem for most Americans, and the problem can be acute for public service workers,” said Christian E. Weller, professor and chair in the department of public policy and public affairs at the University of Massachusetts, in a statement summarizing the findings. (Weller prepared the report, along with Beth Almeida, a senior fellow at the Center for American Progress.)
“And the problem can be acute for public service workers.”
The Importance of Robust Benefits
Weller called the report a “clear indication” that public sector benefits play a major role in financial wellness for the public worker, and that public sector employers would be “wise to continue offering strong benefits packages that not only shore up financial and retirement security, but also serve as magnets for public service workers.”
Indeed, recent Employee Benefit Research Institute (EBRI) research found that robust benefits are a key attraction and retention tool for public sector talent.
Discussing the survey results with Government Executive, Craig Copeland, EBRI’s director of wealth benefits research, stressed the crucial role of generous federal benefits in retaining federal workers.
“Yes, it is still clear that public sector employees—including feds—are more likely to stay at their job longer than other sectors, at least up until recent years,” Copeland told Government Executive.
“The defined benefits plans that public sector jobs usually provide typically are an important part of the reason that public sector employees stay longer—as well as because of the overall typically better benefits offered to public sector employees when compared with the average private sector employee.”
MissionSquare’s report also espouses the importance of benefits as part of the public sector work experience package, and notes that access to solid benefits in turn helps strengthen the financial security of public sector employee households. This includes benefits like retirement plans, health and life insurance, health and health education savings accounts, and paid time off.
“Financial security is also bolstered by greater tenure and job security in the public sector,” the report reads, “which enables more predictable budgeting for short-term and long-term household expenses.
With regard to salary, public employers will likely always have difficulty competing with the private sector, said Lynne Ford, CEO and president of MissionSquare Retirement. As such, she urges public organizations to take full advantage of their strong benefit offerings to build financial security for the public service workforce.
“Traditional benefits like healthcare, pensions and supplemental retirement savings plans lay a strong long-horizon financial foundation for workers,” said Ford, adding that other benefits like student loan repayment and childcare assistance “can alleviate some of the day-to-day financial pressures on public employees.”
10 February 2023
Category
HR News Article