Public employee unions — and Governor Hochul — are pressuring state lawmakers to increase hiring at state agencies because, they say, more than a quarter of the state workforce is poised to retire — a figure more than double what state officials are actually forecasting.
A briefing book that accompanied Hochul’s January State of the State presentation warned “more than 26 percent of the state workforce” is “eligible to retire within the next five years,” and that New York faced a “shortage” of workers. The claim was repeated as part of Hochul’s executive budget proposal a few weeks later.
The governor didn’t provide a source for the 26-percent figure, or explain what “eligible” meant, but that didn’t stop state government’s two largest unions — both of which have shrunk to their lowest membership levels in decades — from running with it.
“The public workforce is facing a labor shortage, and this problem will become more severe because 25 percent of state employees are eligible to retire in the next five years,” the Civil Service Employees Association (CSEA) wrote to its members earlier this month.
The Public Employees Federation hyped it even further, upgrading “eligible” to “ready.”
“We have seen — and in the governor’s budget she talks about — we’re down 12,500 workers, with 26 percent more ready to retire,” Public Employees Federation Vice President Randi DiAntonio told lawmakers at a March 1 hearing. “Those folks ready to retire are gonna go.”
State government can’t justify the number of employees it already it has. The unions, meanwhile, have an incentive to scare and evidently mislead lawmakers because every additional state hire is an opportunity (though no longer a certainty) to boost the union’s bottom line with more dues.
But workforce planning is one area where state government does a better job at both forecasting and sharing their findings with the public. The state Civil Service Department, just a few months ago, had a very different estimate:
“The percentage of the workforce that could potentially retire has decreased marginally from last year, with 16,237 employees — nearly 12 percent of the total workforce — eligible to retire with full benefits within the next five years.”
State pension rules in most cases encourage workers to wait until they’re at least 55 with at least 30 years of service before they retire, and that eligibility is the best indicator of when someone will retire.
What’s more, the retirement-eligibility rate has been trending down for several years, from 19 percent in 2015 to 15 percent in 2019 to 13 percent last year. That decline was driven by the fact that tighter state hiring in the early 1990s meant fewer people will soon be hitting the 30-year mark and becoming eligible to retire with full benefits. The 2018 chart below captures decades-old echoes from times when hiring was either atypically high or low, showing for instance the dearth of people who as of that year had 26 years of experience (hired around 1991).
And the actual retirement rate has been affected by the fact that people are choosing to retire at a later age. The average retirement age went from 59 in 2012 to 61 last year, the Civil Service report showed.
Meanwhile, the state workforce in recent years has gotten younger and been on the job a shorter period. The average age fell from 48 to 46 between 2015 and 2022, and the average length of service went from 15.2 years to 13.3 years. These figures were affected slightly by state police employees being included in the interim, but they support the finding that New York faces a smaller, not larger, retirement wave.
The number of retirements has held steady in recent years, between 5,500 and 6,500. And the Civil Service forecast for retirements has also been a good indicator: its 2016 reports projected about 28,000 people becoming eligible to retire with full benefits in coming years, and just over 30,000 retirements occurred in the five-year period that followed.
So where did the “26 percent” claim come from?
It’s possible that the figure reflects the number of state employees who could retire with a partial benefit, which would require the unreasonable assumption that retiree behavior would suddenly change.
It’s also possible that the original mentions of the number came from a subset of state employees. For instance, a quarter of management-class employees are eligible to retire with full benefits in the next five years, though the average age of that group has historically been considerably higher than the state workforce at large.
Regardless, this episode shows some of Albany at its worst: public employee unions making false claims for their financial gain, and state lawmakers failing to understand, let alone scrutinize, a central part of state operations.