Job growth: public sector vs. private sector

A couple of months ago, I actually sent an email to Calculated Risk hoping that he would break down the job growth numbers for both private and public employment. The most recent recession was one of the few times (other than perhaps the widespread decommissioning after WWII) when we’ve seen widespread job losses in the public sector.

Alternately, when we have talked about employment recovery from previous recessions, we have generally included government employment in the data.

I have no idea if CR remembered my request, but two new posts take a look at the public vs. private and the Bush vs. Obama job losses and recoveries. I’d hasten to add that the economy is a big unwieldy entity that can be bumped in various directions by executive leadership decisions, but there are far more forces at work than governments can understand or control.

Check out CR’s posts here and here.

The upshot of all this is that if governments were adding employees as they traditionally have done, we would be seeing a much faster employment recovery. And the private sector jobs recovery looks much more robust when viewed in isolation from public sector payrolls. The private sector right now is adding jobs more quickly than it did in the long, slow recovery from the 2001 recession, for example.

Here’s a graph from CR of private sector job loss and recovery comparing Bush’s first term with Obama’s:

And a comparison of public sector jobs (federal, state, and local — but the losses have all been state and local):

From Calculated Risk:

The employment recovery during Mr. Bush’s first term was very sluggish, and private employment was down 913,000 jobs at the end of his first term. The recovery has been sluggish under Mr. Obama’s presidency too, and there are still 247,000 fewer payroll jobs than when Mr. Obama’s term started (although it appears this will turn positive in a couple of months).

A big difference between Mr. Bush’s first term and Mr. Obama’s presidency has been public sector employment. The public sector grew during Mr. Bush’s term (up 900,000 jobs), but the public sector has declined since Obama took office (down 590,000 jobs). These job losses are at the state and local level, but they are still a significant drag on overall employment.

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