Simone Del Rosario:

Nearly two million federal employees have a weighty email waiting in their inbox … a fork in the road, if you will.

The Trump administration made its first move Tuesday to reduce the size of the federal workforce, but how will this broad-strokes move weigh on the entire labor market?

The email, sent to most federal employees, is titled “Fork in the Road.” Elon Musk used the same subject line in a similar downsizing move at Twitter.

In the email, government employees are offered the option to resign by Feb. 6 and receive pay and benefits until the end of September.

All they have to do is respond to the email with the word “resign.”

Unions representing federal employees are skeptical.

Among them, the National Treasury Employees Union sent an urgent message to members urging them not to resign. They said the so-called “deferred resignation program” is trying to “pressure,” “entice” or “scare” employees into resigning.

Meanwhile, the American Federation of Government Employees represents around 800,000 workers. President Everett Kelley said in a statement:

“Purging the federal government of dedicated career civil servants will have vast, unintended consequences that will cause chaos for the Americans who depend on a functioning federal government. This offer should not be viewed as voluntary.”

Elon Musk’s America PAC posted to X that an estimated 5-10% of the workforce will accept the offer, resulting in $100 billion in savings.

If that estimate rings true, that would be between 100 and 200 thousand government workers.

That means that many people could soon be flooding the private sector with job applications.

I want to bring in Seth Harris. He is the senior fellow at the Burnes Center for Social Change and the former acting labor secretary of the United States. Seth, thank you so much for joining us as we’re continuing to get new information about this email. What was your initial reaction and where you know? Do you have any warning signs? What’s going on? What are you thinking about here?

Seth Harris

Yeah, so I’m, like most Americans, I’m really familiar with spam emails or phishing emails that try to get you to buy gold or crypto or something else like that. This very much felt like that. This proposal from the Trump Musk administration is designed to sort of trick federal employees into giving up their jobs, not in return for what we typically experience in a buyout where you get a large block of money and then you’re basically out of your job. You leave your job in return for the money in order to make room to downsize the organization, whatever it is that the organization is trying to accomplish, that is not what this plan does, as far as I can tell. Let me just say it’s very badly explained in the email and beyond, but apparently, what happens is you resign, you are kept on staff, but put on administrative leave. You are paid during that administrative leave, but you can be pulled off of administrative leave to do work if you are needed, and that will last until September. So that’s not really a buyout, and it’s kind of hard to know why a federal employee would want to say yes to that proposal. So

Simone Del Rosario
it’s not this idea of an eight month severance like it appears to be on its surface,

Seth Harris
as they have explained it, now, it’s not eight months of severance in that they cut you a check and then you go away and look for another job, or you retire, or you whatever. You live out your fantasy of becoming a potter or a musician. It appears that you stay on administrative leave and you do know work you either do or don’t go to the office. Apparently, for remote work people, they’re able to stay wherever they’re located. It’s just, it’s, it is not what we think of when we think about a buyout. And it’s for that reason there’s a lot of confusion among federal employees. This is similar to what was done at Twitter when Elon Musk took over Twitter. In fact, the language as you as you mentioned in your setup, was the same language they used in the email from Twitter. The difference between Twitter and the federal government is many federal employees have unions, and the unions are explaining to them, educating them, and also their non union co workers, many of whom work side by side, about what this deal really looks like, and they’re explaining that it is not legal to have federal employees on administrative leave for longer than I think it’s a 10 day period. You can’t be on administrative leave for eight months. Um. So it’s unclear that you can ask people to leave, or certainly force them to leave with the threat that their jobs are going to be eliminated. So the unionized workers in the federal government and many others who are going to know their rights, because they’re very smart people. I’ve worked with federal employees, these are very, very smart, savvy people who know the rules governing the civil service system, I think we’re going to see a very, very, very small uptake in this, this buyout scheme. You

Simone Del Rosario
mentioned a couple of legal red flags, which would lead me to believe there will be legal challenges to this email. So what about those employees that want to resign, that want to respond and say, you know, I’m ready to move on from this. This sounds like a great deal for me. Should they have confidence that the terms set forward in that agreement are going to hold with these legal challenges? No,

Seth Harris
they should not have confidence, because the system that has been established by the Office of Personnel Management, the new leadership team put in by President Trump, is not consistent with law. There are existing authorities in federal law for voluntarily downsizing the federal government. You can give people voluntary ways of leaving the federal government. They’re very carefully laid out in the law, and this is not them, and so there’s no binding authority that if employees end up getting screwed in this deal that they can turn to to enforce the terms of the deal not doesn’t seem to be the case that this is a binding contract between the federal government and federal employees. It’s not a part of the collective bargaining system between the federal employee unions and the federal government. Many of these unions have contracts that govern situations like this, so perhaps there will be bargaining along the way, but I think that if I were a federal employee, I would treat this like anything else that gets caught in my spam filter or my junk email filter on my email, ignore it and wait to see how things develop.

Simone Del Rosario
Yeah, they’re certainly in a tough in a tough spot, if they’re interested in taking this offer to have just a week when we know these legal challenges are coming. In fact, you mentioned, you know the system and OPM even the way that the email was sent out is being legally challenged. So there’s a lot of question marks about this, but I want to look a little bit broader now. Let’s say five to 10% of the federal workforce does decide to resign. This goes through and and they are able to significantly reduce the size of government. What is that going to do to the labor market as a whole, hundreds of 1000s of people looking for new jobs? Yeah,

Seth Harris
I think it will. If the numbers are that small, five or 10% I don’t think it will have a very dramatic effect. You’re talking about, you know, 100,000 to 200,000 people. They’re not all going to leave at once. Apparently, this is going to get stretched out over an eight month period. You know, just to put it into context, in December alone, December of 2024 alone, the economy produced 226,000 more jobs. So it’s not like the kind of layoff event that we experienced during the pandemic recession, where millions and millions and millions of workers were losing their jobs in a week, right? This is going to be a fairly small number of workers. Also one of the things that people don’t understand about federal employees is they’re spread out all over the country. They’re not all in Washington, DC. If you had 200,000 people losing their jobs just in Washington DC, that would have a depressive effect on the local and regional economy. But these folks are absolutely everywhere, because they’re serving Americans everywhere, and so I think it will be absorbed into the economy and the labor market fairly easily. Let me just say large layoffs are not a good thing ever. It’s not good for the economy as a whole. But I don’t think that we will see a measurable effect if five to 10% of federal employees accept this sham offer. What

Simone Del Rosario
about within government? I mean, you were at the top of a major government agency. What would losing five to 10% of the workforce look like?

Seth Harris
Right? I think that this is going to be a disaster for the American people, because when you when you offer a blanket exit strategy, let’s call it that, since it’s not really a buyout. When you offer a blanket exit strategy, you don’t really know who’s going to say yes, right? And so the Trump folks have excluded immigration employees, National Security employees, intelligence employees. But imagine, for example, two. Months, two and a half months before the tax filing deadline. If half of the IRS frontline staff who advised taxpayers with respect to filing their taxes, if half of that staff took this plan and they left the government, they stopped working for the government, what would that mean to efficiency and to customer service at the IRS. Imagine if half or three quarters of the people who process social security claims took this offer right, or if the people who are responsible for cyber security in the government, in all the agencies that have cyber security professionals took this offer to go off to work in the private sector. It is. It’s just an extraordinarily bad way to accomplish the result of downsizing the federal government, which is not a result that any of us should want. There is no good argument for downsizing the federal government, except that you hate government, and you don’t very much like the people that government serves, but I think that this could really have some unpleasant side effects, not really side effects, core effects, because we don’t really know who would say yes if this were a real offer, and that’s going to hurt the services that the government provides to Hundreds of millions of Americans, so I it’s just a bad idea all around.

Simone Del Rosario
Seth Harris, senior fellow at the burnes center for social change. Thank you so much, Seth, it’s always a pleasure talking with you. Thanks. Simone, okay.