by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Perhaps you’ve read that governments are shedding jobs as the private sector makes employment gains. As Barron’s “Economic Beat” columnist Gene Epstein says in his latest piece, the implication is that something “must be done to spur catch-up in public sector jobs.” It’s fortunate for us that Epstein steps back and places the recent employment news in context.
[I]f the pain of layoffs is concentrated among government workers, you might expect to see it in a higher unemployment rate. In fact, against an unemployment rate for all workers over the past 12 months of 7.7%, among government workers it’s been 4.2%.
The conventional story applies only if you look back to the 2008-09 recession. Go back two recessions, to the year 2000, and the comparative changes in private and public jobs are exactly reversed. Government layoffs that recently exceeded historical averages were more than offset by previous hiring. Result: If anything, catch-up is required in the private sector.
The year 2000 is a good base year, occurring just before the recession of 2001. Using 2000 as a base also provides a handy report card on employment trends in the new millennium—and private-sector trends barely get a passing grade.
IN 2000, THE NUMBER of private sector jobs averaged 111.1 million. As of July 2013, the seasonally-adjusted tally came to 114.2 million, an increase over this 12 ½ year period of just 2.8%. For perspective, except for periods of recession, from 1960 through 2000, increases in private sector employment of 2.8% or more occurred quite often in a single year.
Over this same period, government employment has grown noticeably faster, despite the recent layoffs. Against an average total of 20.8 million in 2000, government employment ran a seasonally-adjusted 21.9 million in July 2013, an increase of 5.3%.
Even that 5.3% is understated. Since 2000 was a year of the decennial census, the 2000 tally is artificially higher from temporary of employment of census workers, who are not in the tally today. Eliminate them, and the increase rises to 5.8%.
Then, too, the government tally is arguably distorted by the downsizing of the U.S. Postal Service, a trend that is due to the huge decline in demand for mail services. Eliminate postal workers from all parts of the government count, and the increase in government jobs since 2000 comes to an even bigger 7.6%.