Federal Employment Set to Tumble Off Fiscal Cliff

About 14% of the total federal government workforce could lose their jobs if U.S. lawmakers cannot figure out a way to avoid the looming fiscal cliff. That’s 277,000 non-military jobs, of which 48,000 would be lost to civilian defense workers and 229,000 would be lost to non-defense workers.

The data comes from a study at the Center for Regional Analysis at George Mason University. Without Congressional action, automatic cuts to the federal budget of $1.2 trillion will take effect on January 2nd, triggering the job cuts.

When other job losses are added in, the George Mason study reckons that 2.14 million total U.S. jobs would be lost. The direct impact of those job losses total $115.7 billion. The impact on total U.S. output would be a loss of $215 billion and lost labor income totals $109.4 billion. The study concludes that the U.S. will be “pushed into recession during the first half of 2013” unless the Congress acts.

Federal workers have already had their pay frozen for more than two years and U.S. House Republicans have already held hearings raising questions about federal workers’ pay and benefits. And the pressure is sure to mount on federal employees as we slink nearer to the edge of the cliff.

The Center for Regional Analysis study is available here.

Paul Ausick