Private sector vs. public sector job growth

In a perfectly logical world, public employment (i.e., government jobs) would increase on pace with population growth.

We would add more teachers, police officers, sanitation workers, health services employees and the like as the population warrants.

But increased efficiencies have probably cut the need for some jobs.

Two of the federal government’s largest programs — Social Security and Medicare — are primarily charged with writing checks to older Americans and their medical providers. With good technology and procedures, we probably don’t need to add employees in areas like those as fast as we used to.

And there are clearly some areas where we could cut the number of employees. The City of Savannah quit maintaining property owners’ tree lawns a couple of years ago, for example. I was pleased with that decision since I always feared an over-zealous worker would butcher my crape myrtles. I’d like to lose the street sweeper service that disrupts parking on my block every Friday and Saturday night too.

But for the most part, government employees at all levels are performing duties that the citizenry wants.

Again: We hear railing against “big government” all the time, but government employees are doing work that large percentages of Americans support.

There’s a great table in a post by Calculated Risk today showing the recent employment trends for both the private and the public sector.

In 2006, the U.S. economy added 2.07 million jobs, but 209,000 of those were public ones at the federal, state or local levels. That’s obviously just over 10 percent. In 2007, as the economy was slowing before plunging into recession in December of that year, we added a total of just 1.1 million jobs, with 288,000 — more than a quarter — coming in the public sector.

In 2011, we added 2.11 million private sector jobs — the best year for private sector job growth since 2005. But in 2011 we lost 265,000 public sector jobs. That came on top of government job losses of 76,000 in 2009 and 221,000 in 2010.

Absent a couple hundred billion in federal stimulus that went directly to bolster state budgets, we would certainly have seen even larger losses in government jobs.

In 2012, the public sector lost 68,000 jobs.

Those are some big numbers, and if the public sector had added jobs as it typically does in recent years — or even had maintained stable employment — we’d be seeing much more robust employment statistics.

As Calculated Risk notes, “four consecutive years of public sector job losses is unprecedented since the Depression.”

In general, by the way, state budgets are more dependent on sales taxes and income taxes, so state government job cuts generally happened before local governments, which rely more on slow-to-adjust property taxes, felt the worst of their budget crises.

As you can see in the attached graph from Calculated Risk, state and local governments employed about 19.8 million Americans in late 2008, but that number is likely to bottom out close to 19 million later this year. Something close to half of those cuts have been in education.