Differences Between Federal & Private Employees

In the United States, there are about 7.4 million full-time workers employed in state and local governments. The majority of the workforce is employed in the private sector. On the other hand, government employees make up about 12-25% percent of the total workforce.

It has long been debated whether federal or private employees have better jobs. However, each industry has advantages and downsides when it comes to employment. The Law Firm of John P. Mahoney, Esq., Attorneys at Law, PLLC examines the differences between federal and private employees in this blog post.

Public Sector vs. Private Sector

There are several differences between public sector and private sector jobs. A public sector job is within a government agency, while employees in the private sector work for non-governmental agencies.

Public Sector

The public sector encompasses companies that are controlled, managed, and operated by federal, state, or local governments. Their goal is to provide basic public services to the public at a reasonable cost by being self-sustainable and profitable. However, profitability is not the main goal. Public employees are paid through a portion of the government's tax dollars.

Public sector employment areas may include:

• Health and care
• Teaching
• Emergency services
• Armed forces
• Civil service
• City councils

Private Sector

The private sector is run by individuals and companies that are not owned or operated by the federal government. The private sector's goal is to make money, and part of the company's profits go towards paying private employees.

Private sector employment areas may include:

• Financial services
• Law firms
• Estate agents
• Media outlets like newspapers, magazines, or news stations
• Veterinarians
• Aviation
• Hospitality

In some situations, private and public sectors may work together to promote common interests. Private sector businesses can leverage assets and resources from the government to aid in developing, financing, and owning and operating public facilities or services. However, this does not mean they are considered a public sector entity.

Comparing the Advantages of Working in the Public Sector or Private Sector

Working for the government is vastly different than working for a company in the private sector. It's essential to understand how careers in each sector compare in terms of workplace environment, compensation, and job security.

Workplace Satisfaction

According to the Partnership for Public Service, private employees are generally happier with their jobs than federal employees. In 2018, private employees earned a score of 77.1 out of 100 for employee engagement. Meanwhile, civil service employees scored 62.2 out of 100 for workplace engagement.

Compensation

Overall, federal employees make about 17% more in total compensation than comparable employees in the private sector. However, for both public and private employees, this typically depends on their level of education.

Federal government employees with a high school diploma or less usually earn more than employees in the private sector. This also applies to federal employees with a bachelor's degree. However, private employees with a master's degree and/or a doctorate degree are more likely to earn more than public employees.

According to a report by the Congressional Budget Office (CBO), salary depends on the education level of federal and private employees. Federal employees with only a high school diploma compared to a private employee with a similar education level typically earned:

• 34% more in salary
• 93% more in benefits
• 53% percent more in total compensation

Federal employees with at most a bachelor's degree compared to private employees with the same level of education earned on average:

• 5% percent more in salary
• 52% more in benefits
• 21% more in total compensation

Finally, federal employees with a professional or doctorate degree received:

• 24% less in wages
• 18% less in total compensation

In this level of education, benefits were about the same for each sector.

Benefits

Federal employees and private employees also receive different benefits from their employers.

Health Care:

• Private sector: Employers pay, on average, 82% of health insurance costs.
• Public sector: The government pays, on average, 70% of health insurance costs.

Retirement Pensions:

• Private Sector: The average pension for adults over the age of 65 that worked in the private sector is $10,788 a year.
• Public Sector: Federal government employees receive an average pension of $27,687 per year. State and local government employees receive an average pension of $22,662 per year.

Paid Time Off (PTO):

• Private sector: Will receive, on average, 7.6 days of PTO for holidays and 10 days of PTO for vacations.
• Public sector: Will receive 10 days of PTO for holidays and 13 to 26 days of PTO for vacations. This will depend on how long the employee has been employed by the government.

Employee Assistance Programs (EAP):

• Private sector: 46% of private-sector employers offer their employees an EAP.
• Public sector: 78% of public-sector employers offer their employees an EAP.

Job Security

Private companies go out of business, downsize, or relocate. However, there will always be a need for the services the government supplies. Federal employees have more job security except when job cuts are made due to economic recessions. Also, the rights of public employees are protected by law, so government employees cannot be dismissed unless there is a cause.

On the other hand, privately employed workers can be fired for any reason. This excludes cases where they are fired because of their race, gender, age, disability, or if they are pregnant. Private sector employees are three times more likely to be fired than employees working for the government. In 2016, 1.5 million people were fired in the private sector, while only 88,000 federal employees were fired in the government.

Federal Employees Have Legal Rights

With regards to employment, private employees do not have the same rights and protections as federal employees. Therefore, it is easier to fire a private employee. Public sector employees are more likely to stay employed because their rights are protected under the Fair Labor Standards Act.

If you are a federal employee and have been wrongfully terminated, reach out to The Law Firm of John P. Mahoney, Esq., Attorneys at Law, PLLC. It's important to remember that you have options when you unfairly lose your job. We're ready to fight to protect your rights and help you seek justice.

Call The Law Firm of John P. Mahoney, Esq., Attorneys at Law, PLLC at (202) 350-3881 for more information about your rights as a federal employee.