National

Sacked public servants will suffer for years even if they find a new job

The thousands of public servants losing their jobs in the federal government's program will continue to suffer for years even if they manage to secure a new job, according to new academic research.

Looking for work.
Looking for work. Photo: Photo: Jesse Marlow

Flinders University researchers have found that life after the bureaucracy looks grim for the 16,500 Commonwealth public servants facing the axe in the next four years.

The study showed "significant pay and psycho-social" costs to public servants who  found private sector jobs and lead researcher Genevieve Knight says the research showed governments needed to count the human cost of slash-and-burn public sector employment policies.

Dr Knight and her team at the university's National Institute for Labour Studies looked at 80,000 records for 6000 Australian workers between 2003-2012 to track the experience of employees moving jobs between the public and private sectors.

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The research found that after three years workers who had moved from public service to private enterprise had not returned to the same pay levels as their former colleagues.

In the first year, public servants who moved to the private sector had 6.4 per cent lower earnings on average than those who stayed in the bureaucracy and were not very happy about it.

 "They had lower job satisfaction related to pay, probably reflecting these same significant earnings losses," Dr Knight said.

Three years later, the data showed they were still earning 1.9 per cent less.

The labour-market expert warned against underestimating the lifetime effect of that pay disparity.

"OK, it's only 1.9 per cent when they recover in the third year, but to understand the scale of loss you have to accumulate the losses over the 3 years and then think that this is spread over about 13 per cent of someone's entire working life of 40 years to get an idea of what it means," she said.

"The research also showed significant psycho-social costs to public servants who could find private sector jobs.

"They had lower job satisfaction related to pay, probably reflecting these same significant earnings losses."

Dr Knight said her team's research only revealed part of the story because it was confined to those former public servants lucky enough to find new jobs.

"We didn't even count the cost of people who don't get another job, those who are stuck in unemployment," she said.

The South Australia-based academic wants governments to look at the bigger picture when considering sacking thousands of their workers.

"Our main point is that we would like greater depth of analysis for policy such as this," Dr Knight said.

"Ideally, evidence based policy.

"Some analysis which indicates that it might be worthwhile because the benefits will outweigh the costs is a start.

"The government has not presented a clear social cost-benefit with arguments linked to how services are maintained, or performance measures showing improvements from such cuts, and what changes the cuts should achieve."

Dr Knight suggested that a full cost-benefit analysis on mass-sackings in the public service might reveal the policy is a false economy.

"When all the additional costs for the nation of unemployment and those we have considered are counted and accrued over time, they may outweigh the cents saved in the initial budget year," she said.

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