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MissionSquare Publishes Report on Public Service Workforce Financial Wellbeing

On February 2, 2023, the MissionSquare Research Institute (formerly the Center for State and Local Government Excellence at ICMA-RC or SLGE) published its report, Examining the Financial Wellbeing of the U.S. Public Service Workforce. The Research Institute analyzed the financial health of public service employees. The report indicated that although many state and local employees have financial challenges, many public sector employers help to strengthen the financial security of their workforce through their employee benefit offerings.

In addition, the report indicated that state and local governments continue to be challenged with attracting and retaining employees. For many Americans, including public sector employees, financial security is an increasing concern especially for those facing economic uncertainty and strained household budgets.

The key findings include:

  • Many public sector employees reported having some financial difficulties. Specifically, nearly 20% of all public sector employees and about 17% of public education employees reported not being able to afford health care.
  • From 2017 through 2019, 14% of all households employed in the public sector indicated that they could not pay all of their bills as well as 11.3% of public education employees.
  • Public sector employers and employees have concerns about the retirement security of the state and local workforce. About 41% of public sector human resources professionals indicated that their employees are financially prepared for retirement. Over 80% of public sector employees reported being concerned that they will have sufficient funds to last through retirement.
  • Access to employee benefits helps to strengthen the financial security of public sector households including retirement plans, health and life insurance, health and education savings accounts, and paid time off. Financial security is also supported with improved tenure and job security in the public sector which helps to ensure more predictable budgeting for short-term and long-term household expenses.
  • In general, public sector employees save more than private sector employees. Public sector employees had higher combined employer and employee contribution rates to defined contribution plans (401(k) or 403(b) type plans) at 15.7% as compared with private sector employees at 13%.

The report is available here.