85% OF MILLENNIALS WORKING IN STATE & LOCAL GOVERNMENT PLAN TO STICK WITH THEIR EMPLOYER, BUT BENEFIT CHANGES COULD PUSH THEM OUT THE DOOR

Most Millennials Working in State and Local Government Satisfied with Job Despite Knowing They Could Earn More in the Private Sector

Webinar to Review Findings on February 13th at 2 PM ET

WASHINGTON, D.C., February 5, 2020 – As governments struggle to fill jobs that deliver vital public services, new research from the National Institute on Retirement Security(NIRS) finds that Millennials working in state and local government are satisfied with their jobs and intend to stay with their employers so long as their benefits are not cut.

In a nationwide poll of state and local employees, 84 percent of Millennials say they are satisfied with their job. This high job satisfaction among state and local Millennial employees comes despite sentiment that they could earn a higher salary in the private sector. Most Millennials in state and local government (80 percent) believe they could earn a higher salary working in the private sector, and only about one in four see their salary as very competitive.

The research also finds that state and local Millennial employees (85 percent) say that they plan to stay in their job until they retire or can no longer work. But, Millennials’ job loyalty would alter if their benefits were changed. Some 78 percent say their healthcare benefits is one reason they chose a position in the public sector, and 77 percent say they would be more likely to leave their job if this benefit were cut.

Similarly, a high number of Millennials (84 percent) say that a pension benefit is the reason they stay in a state and local government job. These Millennials say that cutting their pension benefits would make them more likely to leave their state or local government job (71 percent).

These findings are contained in a new Issue Brief, Millennial State & Local Government Employee Views on Their Jobs, Compensation & Retirement, available here. This research provides a deeper analysis of NIRS’ November 2019 opinion research report, and it drills down to examine the views of Millennials working in state and local government. A webinar is scheduled for Thursday, February 13, 2020, to review the findings and respond to questions. Register at no charge here.

The Millennials survey data reveals that:

  1. Despite knowing they could earn a higher salary in the private sector, Millennials working in state and local government are satisfied with their jobs and total compensation. The vast majority (84 percent) are satisfied with their job. One in four say their salary is very competitive, but most (80 percent) say that their total compensation package (salary and benefits) is competitive.
  2. State & local government Millennial employees are planning to stick with their current job, but changing their benefits might push some out the door. Most Millennials (85 percent) in state and local government say that they plan to stay in their job until they retire or can no longer work. Some 77 percent say they would be more likely to leave their job if their healthcare were cut. A high number of Millennials (84 percent) say that a pension benefit is the reason they stay in a state and local government job, and 71 percent say that cutting their pension benefits would make them more likely to leave their state or local government job.
  3. Millennials working in state and local government are highly supportive of pensions, and they see the advantages of their benefits beyond retirement. Some 97 percent of Millennials in state and local government have favorable views of pensions, and more than three-fourths (77 percent) say that they prefer pensions over 401(k) accounts. Millennials see the value of pensions beyond providing retirement security. Some 92 percent of state and local Millennials agree pensions serve a role in incentivizing long public service careers, while 94 percent say that pensions serve as effective tools for recruiting new employees to state and local government jobs
  1. State and local government Millennial employees feel confident about their retirement, but worry about cuts or changes to benefits. Most Millennials (74 percent) working in state and local government say they are confident that they will be financially secure in retirement. But, 85 percent say they are concerned about potential pension benefit cuts, and 84 percent expressed concern about government officials underfunding pension contributions. More than three-fourths of state and local Millennial employees (77 percent) say they are concerned about cuts to their cost-of-living adjustments.
  2. State and local government Millennial workers say eliminating pensions has negative consequences. Nearly all agree (92 percent) that eliminating pensions will weaken government’s ability to recruit and retain workers to deliver public services. The vast majority (86 percent) say that eliminating pensions will weaken public education, and most Millennials (82 percent) in state and local government agree that eliminating pensions will weaken public safety.

“The key takeaway from this research is that Millennials understand the tradeoff between pay and benefits that often comes with a public sector job. Clearly, benefits are a driving force behind Millennials decision to seek and stay with a career in public service,” said Dan Doonan, NIRS executive director.

“As Baby Boomers retire and Millennials dominate the workforce, it’s imperative that government employers attract talented younger employees committed to public careers that keep our communities healthy and safe and educate our children. Benefits  play a key role in workforce loyalty for Millennials, turning jobs into careers,” Doonan explained.

In 2016, Millennials became the largest generation in the U.S. labor force. According to the U.S. Bureau of Labor Statistics, more than 22.5 million U.S. workers are government employees with 2.8 million at the federal level, 5.1 million at the state level, and 14.6 million at the local. In 2019, 32 percent of state and local employees were Millennials. More than half (58 percent) of state and local public employees work in education, while 13 percent work in public safety, and 12 percent work in health and safety.

“But despite state and local Millennial employee high satisfaction with their benefits, governments have been cutting back on health and retirement plans or shifting more costs to employees. We hope this research will inform the policy debate on Millennial preferences, thereby helping government employers make informed decisions related to the public workforce and benefits. More benefit cuts could have unintended and detrimental consequences — like driving Millennials out the door and harming public services,” Doonan said.

Conducted by Greenwald & Associates, information for this study was collected from online interviews between August 22 through September 12, 2019. Sample was selected using two online panel providers, with 1,118 public sector employees aged 18 and older completing the survey to include 362 teachers, 284 police officers, 204 firefighters and 268 other public sector employees. The final data were weighted by age, gender, and personal income to reflect the demographics within each of these professions, and also weighted to reflect the distribution of these professions within the public sector workforce.

The National Institute on Retirement Security is a non-profit, non-partisan organization established to contribute to informed policymaking by fostering a deep understanding of the value of retirement security to employees, employers and the economy as a whole. Located in Washington, D.C., NIRS’ diverse membership includes financial services firms, employee benefit plans, trade associations, and other retirement service providers. More information is available at www.nirsonline.org. Follow NIRS on Twitter @NIRSonline.

Contact:  Kelly Kenneally | kkenneally@nirsonline.org | 202.457.8190