by Ralph Brauer | 7/15/2008 11:33:00 AM
brain drain

Part One explored the impact of the brain drain from public service to private profit. However, there is one area where the brain drain thesis does not hold true--at least in part--and that is government employment. But as we shall see, there are even ominous developments there.

A study by Kenneth J McDonnell of the Employee Benefit Research Institute showed:
As of September of 2007, overall total compensation costs were 51.4 percent higher among state and local government employers ($39.50 per hour worked) than among private-sector employers ($26.09 per hour worked).

McDonnell found one major reason for this is:
Benefit participation rates are higher for state and local government employees and the costs of providing these benefits are higher.


However, McDonnell's study and others with similar findings need to be contrasted with the continuing privatization of government jobs. The centerpiece of this has been the controversy over private contractors in the Iraq War followed by the privatization of Veterans Administration hospitals, but in fact privatization has taken place from the federal to the local level and involved everything from prisons to insurance.

Curiously some of the most interesting data on privatization comes from a right wing think tank, the Reason Institute. It has released an annual privatization report for two decades. In its 2007 report it noted:
Since 2003, 12 percent of the federal workforce has faced a competition, winning 83 percent of them and generating savings
of $6.9 billion.

It doesn't take a Harvard degree to conclude that the federal employees "winning" these competitions were in part doing so because of wage or work place concessions. In essence privatization has become the new hammer to pound government employees into submission.

The one thing keeping them from doing that is that government employees have the strongest unions in the country. The Bureau of Labor Statistics notes:
Within the public sector, local government workers had the highest union membership rate, 41.8 percent.

The Aging Federal Workforce

Still all is not well for government employees. One trend should give us pause and add to concerns about the brain drain: the age of government workers. First, the average government employee is older than the average "civilian" employee. According the Bureau of Labor Statistics:
About 75 percent of government employees were 35 and older, while about 60 percent of private sector workers fell into that range.

In addition the average age of federal employees has slowly been creeping upward from 44.1 in 1994 to 46.8 in 2004. Remember, this is the average age. Essentially a goodly number of the most experienced government workers are nearing retirement, a trend that could have huge systemic implications for the brain drain and keeping the playing field level.

The Impact of Aging on Other Public Sector Jobs

As someone who formerly was involved in national school reform, I used to remark in speeches that the biggest unrecognized problem in American education was our aging teacher workforce. The Statistical Abstract reports that over one third of our public school teachers are over 50 and almost 60% are over 40. The percentage of teachers under 30 is less than half that of those over 50.

Even more daunting are the figures on teacher experience. An astounding 72% of teachers with ten to 20 years of classroom experience are over 40. A quarter of those are over 50. Two-thirds of our teachers with over 20 years experience are over fifty. In essence our teaching force exhibits many of the same demographic characteristics as our federal workforce.

If we move to social work, we see a similar pattern According to the National Association of Social Work, 39% of all social workers are over 53 and 73% are over 43! Three-fourths of them were born before John Kennedy was President. More than a third of the social workers had more than 20 years experience.

In short, the public sector is facing a brain drain that will be caused by an aging workforce, a workforce that is not being replaced by younger workers.

The Brain Drain and Race

There remains one more issue to add to the brain drain equation--race. How well is the public sector performing in attracting people of color?

Federal government employment statistics are not encouraging. Employment of all people of color gained only 1.2% between 1998 and 2004, while the civilian labor force made a slightly higher gain at 1.3%. Yet after those eight years the percentage of people of color employed by the federal government still remained behind that of the civilian labor force.

The total percentage of people of color employed by the federal government in 2004 was 14.6% as compared with a national percentage of people of color of 25%. In other words, people of color are being employed by the federal government at only 58% of their total population percentage--this after decades of affirmative action!

It is interesting to compare these data with those of other public sector jobs. In education, for example, people of color make up 16% of the nation's public school teaching force which is 10% better than the federal government but still below what it should be based on population percentages.

The national social work survey shows the most dismal results, which are especially discouraging considering the disproportionate number of people of color served by these workers. According to their data, people of color compose only 13% of all social workers.

The dismal employment statistics of people of color are, of course, no secret, but that they should be so in the public sector which at least purports to support the ideals of equal opportunity is a national embarrassment. Yet, few have connected these statistics to the issue of the brain drain.

Not only is the public sector failing to employ young college graduates, it is failing in employing people of color. The bottom line of this is that people of color have less impact on public policy if they form such a small percentage of public sector workers. While much is made by politicians of both parties about high level appointments of people of color, the day-to-day operations and the decisions that come with them are made by everyday workers further down the chain of command.

If social work, education and the federal work force are all staffed by over 80% whites, what happens to the average person of color who is a client of those agencies? From a policy perspective, what kind of decisions are made by a largely white work force as opposed to one that might have more representation from people of color?

Some might argue with calling this part of the brain drain, but in fact it is a central part of it. Any management textbook will tell you that decision-making is best accomplished when managers, whether in the public or private sector, have access to a diversity of opinions. If all management hears is a white, middle class perspective, then we will get white, middle class policies.

Some might retort that aren't we a white middle class society, which may be true from a demographic point of view, but won't be for long in many states which will have a majority of people of color in the next generation. More important is the fact that we live in a diverse world. If we fail to recognize diverse perspectives, we will fall behind in that world.

A Perfect Storm?

This series started out with the example of how large corporations have a huge advantage over the private sector in terms of their use of systems thinking and system dynamics modeling. While some of that discussion may have seemed a bit dense and even out in left field or further, there was a reason for leading with that example because the best way to understand the brain drain is from a systems perspective.

First, we have the trend of increasing college loan debt which forces graduates away from public sector jobs. Then we have the increasing privatization of government and the age of government workers, particularly in the federal government. Finally, there is the issue of the racial brain drain.

All are interrelated and feed on each other. College loan debt makes it less likely young people will enter the public sector. Privatization means there are fewer jobs for them and puts pressure on those who still have the jobs to make work and policy concessions. The aging government workforce means that within the next decade we will face the retirement of a large number of our most experienced workers. The racial brain drain means our public sector lacks diversity in both people and perspective.

In systems terms, the perfect storm could emerge when fewer young people will be able to enter the public sector at a time when we will need them more than ever to replace those who are retiring and fewer people of color will be staffing a public sector work force at a time when the percentage of people of color in the United States is growing. The growing use of privatization leads to the inevitable conclusion that just like our undermanned forces in Iraq, we will turn to private contractors like Halliburton and Blackwater to do those jobs for us.

The Social and Political Implications of the Brain Drain

If America's once-vibrant public sector succumbs to privatization, fails to attract talented young people to replace an aging public sector work force, and continues to falter in its commitment to attract people of color this nation is headed for trouble. When you connect the brain drain with budget cuts imposed on the public sector because of tax cuts for high rollers, it doesn't take a conspiracy nut to ask the question as to whether the Counterrevolution is intent on forcing the public sector into becoming a corporate fiefdom.

If you think this scenario fanciful, ask the people in Richland, New Jersey. Situated on Route 40, the town serves as the headquarters for Dalponte Farms, which grows mint for Bacardi rum. Both Bacardi and Richland had mint green on their minds when they cut a deal that would rename Richland "Mojito" in honor of a cocktail being publicized by Bacardi. In exchange, the rum manufacturer offered the township $5,000 for a park gazebo, playground equipment, and a revitalization project for Route 40.

Systems people like to talk about gaps and their impact on the system and there may be no bigger gap facing America than the reality of the brain drain and the ideals of this country. The brain drain already threatens to profoundly change the lives of our children by further tilting the playing field toward the private sector.

Yet have you heard either Presidential candidate talk about this issue? Do either of them have plans that will remedy it? Or are we headed for another election in which the choice is between one candidate who promises to take us back to 1900 and another that promises business as usual?

In the end the choice is clear: do we want a United States of Mojito or a nation that fulfills the ideals of our Declaration of Independence and Constitution? Do we want a level playing field or no playing field at all?

Coda: Academia:

Since the main readers of this blog reside in academia, a special section is needed to describe the brain drain's impact on our colleges and universities. The loan crisis impacts students who want to be professors just as surely as it does those who want to be lawyers, except lawyers can at least graduate with the hope of landing a six figure job.

There may be a coming perfect storm in the public sector, but our nation's graduate schools may already be experiencing that storm as student loan costs increase while government aid to education decreases. This formula promises a severe decline in our nation's most important intellectual capital--its research colleges and universities.

Some might argue there is a tuition difference between law school and graduate school, plus grad students can apply for assistantships that are not available to law students, but typically it takes longer to get a PhD than an LL.D. Then there are the expenses of writing a dissertation which depending on the topic can involve extensive travel to research libraries or sites.

There is a certain irony in the fact that America's colleges and universities are part of the problem in that even at well-endowed institutions, large loan debts are common. My son graduated from a prestigious private college with one of the highest endowments in the nation [that's what happens when Warren Buffet is on your Board of Trustees], public or private, an endowment that according to a friend who was approached to serve on the Board of Trustees would allow the college to essentially offer each student a free ride. Currently as far as I know, of the high-prestige, high endowment schools, only Princeton has a policy that approaches this ideal.

Yet there are very few Princetons and a lot of prestigious public universities that have been hit by both state and federal budget cuts that have them reducing hiring, freezing salaries, and cutting programs. Some of them have succumbed to the academic equivalent of privatization, hiring part-time, non-tenure-track "private contractors" who manage to cobble together jobs at several institutions in order to make ends meet.

There is also another systemic dimension to academic budget cuts: as colleges and universities fail to--or cannot afford to--enroll more graduate students, the teaching burden of regular faculty increases, or at some point departments must contract. This produces a negative reinforcing loop that can lead to what we in systems thinking call a "death spiral"--a negative loop that functions like a whirlpool.

In a desperate search for money to replace these budget cuts virtually every college and university has cut deals with corporate vendors to give them exclusive rights to everything from what goes in campus vending machines to the computers sold at the book store. The University of Minnesota even entertained an offer from none other than Victoria's Secret.

The desperate situation of America's P-12 public schools is well-known, the desperate situation of America's institutions of higher education is less publicized. But if our colleges and universities continue to suffer where will those P-12 teachers come from? or the needed public sector workers?

In a system dynamics model one of the symbols is a faucet, which stands for a flow--something that regulates the movement between two quantities called stocks. Your bank account is a stock; the interest rate for it and your withdrawals and deposits all impact the inflows and outflows from that account.

In higher education there is an increasing feeling someone has turned off the faucet.

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