Schedule F Order Relies on a Myth the Private Sector Fires More People Than the Government

The notion that companies remove employees for cause more readily than federal agencies is not supported by the data.

President Trump’s executive order establishing a new “Schedule F” would politicize what should be professional, merit-based, non-partisan government jobs. The premise for creating this category of workers is based on two basic arguments: 1) that it’s too hard to fire poorly performing feds, and 2) that the career workforce is largely composed of a deep state disloyal to elected officials

But as with so many important issues in America today, the debate around these arguments is often disconnected from the evidence. What do we know about firing feds, especially in comparison with the private sector?

The first point to note is that it’s not that easy to fire private-sector employees for cause. They enjoy a wide range of protections, including an obligation for employers to act in good faith, and the use of employee handbooks creates an implied contract of protection. Layoffs resulting from a shift in economic circumstances are one thing. But firing for cause is quite a different matter.

There are countless stories of private employers promoting, transferring or reassigning employees to avoid firing them for cause. Such private sector practices are legendary—so much so they became fodder for a Seinfeld episode

It turns out that it’s exceptionally hard to make comparisons between firing-for-cause in the private sector and the federal government. The data for direct comparison just isn’t there. But we have some valuable clues: The Bureau of Labor Statistics collects information about layoffs and discharges, and that information is fascinating.

On first glance, it appears to be much easier to fire private-sector workers. In August 2019, before COVID scrambled the workforce, just 0.4% of feds were laid off or fired. In the private sector, the rate was 1.3%. So you might conclude that it’s three times easier to fire private-sector workers than feds. But is it?

The private-sector numbers include some industries with very high rates of churn, like entertainment, construction, and leisure and hospitality. Moreover, these are industries that don’t have many governmental equivalents. The federal government doesn’t run theme parks and, when it comes to construction, it contracts that out. 

Consider other industries where the workforce matches up more closely, like finance and insurance, health care and social insurance, education and health services. Here the layoff and discharge rate is much closer to the federal government’s rate.

Now, factor in one more thing: Layoffs in government are relatively rare because government operations are relatively stable. Congress wants the federal government to continue doing almost all of what it’s doing, so federal employees don’t tend to be subject to layoffs nearly as often as in the private sector. The data don’t allow us to separate “layoffs” from “discharges,” but it’s a fair bet that if we could boil away layoffs in these industries that are due to the ups and downs of the business, the federal and private “discharge” rates would be pretty similar in head-to-head comparisons. 

We might want to make it easier to judge the performance of feds and to discharge those not doing good jobs. But it’s hard to make the case that the federal government does a significantly worse job of this than in comparable private sector positions.

That leaves the other case for Schedule F: rooting out disloyal employees in the “deep state.” There is a very powerful case for determining federal employment based on merit to protect the public and insulate the workforce from the whims of politicians.  

If the rate of firing poor performers in government is comparable to that in the private sector, then the case for Schedule F is reduced to an impetus to transform the federal workforce from a merit system to a spoils system. And that’s an argument long settled by nearly 140 years of tradition and policy.