The Private Sector Is Not Fine, the Public Sector Is Still Fat
Meanwhile, state and local government employment actually continued to increase as the economy began to worsen and — partially sustained by stimulus funding which didn’t stimulate anything — stayed above its January 2008 level until near the end of 2009. Even now, at 5.073 million, state government employment has only gone back to where it was in mid-2006. That’s not good enough, because that six-years-ago number resulted from an employment spurt of about 10% during the previous eight years. Local government has been hit harder as a percentage of its January 2008 workforce, but the growth in headcount of almost 17% during the previous decade was even more out of control.
Even on a percentage basis, it’s clear that the private sector, where employment is almost 4% lower than it was at peak employment, is still the biggest problem — or “drag,” if you will — of the bunch. Wait until you see what that means in terms of actual headcount:
President Obama can brag all he wants about how “we’ve created 4.3 million jobs over the last 27 months” — that’s what he said, as if he had anything at all to do with it except to keep the number from being larger (the reporter’s question which led to his answer concerned “your own policies,” so there’s no alternative interpretation as to the identification of “we”). The fact remains that we’re still 4.6 million jobs below getting back to where we were at peak employment — even before considering population growth during the past four-plus years. At the average monthly job growth of roughly 160,000 during that time, we’ll get back to where we were in late 2014. That’s bad enough, but at the average private-sector job growth of 85,000 seen during the past two months, we won’t get there until early 2017, shortly after the end of the next presidential term, which hopefully won’t be Obama’s. Sadly, given the “Taxmageddon” scheduled to visit us on January 1 and the president’s and his party’s refusal to do anything about it before the election, at least several more miserable months are a virtual lock.
Really now, how can anyone say that the area which is responsible for well over 90% of the 5,000,000-job shortfall and where part-timers are rapidly supplanting full-time employees is “doing fine”? I’ll tell you how: We have a president who has never managed anything bigger than a Senate office budget in his entire life, has no clue as to what’s going on outside of his Beltway/”Chicago way” bubble, and has only fever swamp-driven higher education, community organizing, legal system, and political backgrounds as points of reference. He isn’t merely out of touch; he’s out of reach.
WHAT IF WASHINGTON WANTED TO EAT ALL OF THE RICH HERE IN AMERICA?
http://www.youtube.com/watch?v=661pi6K-8WQ
“3.He still believes, after well over three years of proof to the contrary, that the road to recovery is historically ineffective Keynesian demand-side stimulus.”
This is what is so scary about Obama. Even though the first “stimulus” proved to be a huge and expensive failure, Obama still thinks that we need more of the same. I don’t know if he’s either just plain stupid, or he is determined to grow the public sector jobs to such a huge extent that the damage would be impossible to undo. Why do I believe it’s the latter? Because that’s what Obama is, a far-left liberal who’s only answer to everything is more government spending. I shudder to think how much more money will go flying out of Washington if Obama is re-elected (God help us).
The only good news is that, with the Republicans holding the House, no more “stimulus” spending will take place before the election. Better to do nothing at all than to throw more money down a rat hole.
Sadly, he doesn’t “know” the stimulus was a failure because to him it was a great success: it poured money into his specific base interest groups, namely public-sector union groups (teachers, police, fire) and other state and local government workers. To him, SUCCESS!! To everyone else FAILURE!! Even more sad, he and his followers DO NOT CARE.
To Obama, it was a success it pumped billions into Unions and Union workers, until the money ran out. When the money ran out for the Unions and the workers the money ran out that is funneled back to Obama from the Unions.
The whole thing is a temporary fix that looks good on paper and till is dies.
It is all Smoke and mirrors, Except for the Private Sector American Tax Payer,
that is saddled with the debt to buy a union vote and the union buy a President
Ive been saying that for years! Its real easy to spend a trillion dollas and make the economy look good for a couple of years. Not to mention he saved a large chunk of that stimulus to be spent during his last year of his first term. Re-election boost? Obama is the never-ending-campainer! Hes a career politician!
I totally agree with what youve said. Its not that the stimulus might not have helped a little but there is such little oversight on all this money it is riddled with fraud and flat out thieves! I can only come to the conclusion that someone who has been raised AND LIVED so radically left all his life would rather see the country go under than have the private sector fix its own problems. I was somewhat on board with Obama when he was elected but these 4 years I have learned how dangerous having an idiologe in the White House can be. Really people, how can we trust a guy who has never had a job where he had to create his own wealth? His entire understanding of how this country works is based on books and classrooms? Remember college? How much of what you learned is really applied to your job today? Very little.
I’d like to see a population-adjusted graph of the job situation, including the millions of jobs formerly held by illegal aliens who have left the country.
The real number of jobs lost relative to the population is millions more than they are telling us.
And even that doesn’t count the jobs that impoverished seniors now need but can’t find because their savings were wiped out by Sachs and Soros in 2008. Nor the jobs that teenagers would like to have.
I don’t think the illegal’s filled anything but hard labor jobs, roofing jobs, landscaping, and low paying unskilled work. Not to say they had a right to any American Jobs, they did and do not have a right to any job or even be here.
The Manufacturing and assembly jobs went overseas for $ 30 a day or week.
What we must look for is what we have in this country that the world needs.
Oil and Natural Gas, Drill, Pump, Ship, Sell, each are jobs with Payroll, Profits, and Taxes. Near each job site needs help, money sent home creates more jobs. These are positive plus ideas that do not cost the Tax payers one thin dime but add to the economy. But they will not happen with Obama because they are not Union jobs that pay kick backs.
Is “Job Losses since Jan 2008 peak” cumulative? When it shows May 2012 as “-4,607,000″, is that the total losses, which are obviously trending positive since January 2010, or cumulative, in which case the rate of loss is simply slowing?
Net losses.
It would be interesting to see an analysis of why the private-sector losses seem to be decreasing since May 2012, and whether this trend will continue.
Roughing that out, If we had only added 1,000,000 jobs per year (83K per month) after the January 2008 peak, we’d have about 4.3 million more people working, bringing a lowball estimate of the true shortfall to over 9 million.
Excellent article. The charts and discussion place Obama’s non-gaffe statements in context, which is invaluable.
The most daunting “headwinds” we face are Obama and his policies.
When is someone going to realize the problem is government greed? A greed that says to the people “You cannot keep your own money, if you do want to keep your own money you are evil and selfish.” Government cannot do without but you/we/I can go hungry, it’s not a problem, the government will give you food stamps.
Money is citizens property that the government is confiscating for their own power. It is not their money, country, or product, all money is the property of the person that makes it.
Read in context, what the President said is absolutely true. Can we stop the misinformation? The private sector is creating jobs, and the public sector is losing jobs. The public sector lost over 197,000 jobs in the last few months alone due to the tax and expenditure cuts forced by congressional Republicans. But the private sector added over 780,000 jobs in the same few months. There has been steady private sector job growth in the last 27 months which has totaled over 4 million private sector jobs. Since Obama was elected, the public sector has shed 600,000 jobs. If you added those jobs back, the unemployment rate would be below 8 percent.
And what exactly do you mean that state and local governments should “reform themselves”? Laying off even more state employees, so that they can’t pay their taxes or purchase consumer products which create more jobs? Great way to get America back to work. In fact, the shedding of public sector jobs actually hurts the private sector because it decreases the demand not only for consumer products purchased with their disposable income, but for private supplier industries that support these worker’s duties. Laying off teachers and subcontractors for example reduces the demand for the products and capital equipment from private vendors that these individuals use to do their work (computer software and books, concrete and caterpillars, etc.)
Those are simply the facts. Republicans can believe what they like.
“And what exactly do you mean that state and local governments should “reform themselves”?
I’ll answer that in another quote from the article “Do what Scott Walker has done”. In case you don’t know what Scott Walker has done – and there’s a good chance of that since you missed the obvious answer – he has prevented the lay offs of teachers and other public sector employees by effectively increasing the efficiency of the local governments of his state.
Also you said “Laying off teachers and subcontractors”. I’ve explained the teacher thing already but subcontractors are not public sector jobs even if they do get paid for services to a government. I know it’s picking nits but public v. private is exactly what this article is about.
No one said it wasn’t “true” they only showed how the “truth” doesn’t mean what Obama (or you) thinks it does.
Chart 1 shows the “true” picture. You see where we lost 8% of the private sector jobs before the growth? Or did you miss that? Are you willing to fire another 4-6% of the state and local employees and 15-20% of federal employees in order to start “growing?”
And of course public sector jobs create nothing and pay for nothing, whereas private sector jobs pay for public sector jobs; so the notion that ‘jobs are jobs’ and a public sector job is as valuable as a private sector job is nonsense.
“In fact, the shedding of public sector jobs actually hurts the private sector because it decreases the demand not only for consumer products purchased with their disposable income, but for private supplier industries that support these worker’s duties. Laying off teachers and subcontractors for example reduces the demand for the products and capital equipment from private vendors that these individuals use to do their work … those are the facts.”
Milton Friedman just rolled over in his grave. Perhaps you did not realize he was being ironic when he asked “why not use spoons …?”
http://www.realclearpolitics.com/2011/06/22/why_technology_doesn039t_destroy_jobs_257909.html
When you said, “The public sector lost over 197,000 jobs in the last few months alone due to the tax and expenditure cuts forced by congressional Republicans” what you meant to say was that those jobs disappeared when the House declined to continue spending Federal tax dollars to support State and Local Government employment. Recall, please, that the 10th Amendment reserves to the States the right [and responsibility] to hire their own employes. There is no requirement that the Federal Government pick-up the cost of their overspending.
While you are shilling for the President, note that private sector employment fell by about 9 million jobs between January 2008 and January 2010, and has only regained about half of them. State and local governments combined have lost fewer than 500,000 jobs since May 2009, and the Feds have managed to hire about 224,000 more. So, yes, the private sector has recovered about 4 million jobs since January 2010, but zero of that gain is do to anything Obama had done.
Author mentions the 17% growth in public sector jobs in the period before the stuff hit the fan, but a graph of what came before the recent drop in government jobs is instructive:
http://www.cato-at-liberty.org/growth-in-government-employment/
I guess that, to the left, all of those jobs added before were absolutely essential and any reduction now is a disaster.
Your notion that we should keep government huge and keep government payrolls huge, just to provide paychecks to people, is insane.
You hire people to do a job. You don’t make work just to hire people.
there is a very large contingent of gubamint jobs that are worse than useless. Virtually all of the bean counters and regulators are simply sand in the wheels of commerce. Defense, emergency services and national security is the only necessary function. Even teachers, it is becoming increasingly clear, perform functions that government can not do well. Private teachers would do better jobs, probably improving on public teaching capabilities by a factor of more than 2 in just a few years.
Many of the government peripheral functions aren’t evil, IT, support systems, etc., but since they support unnecessary (or worse, dangerous) functions in the first place, they are also wastes of resource. Any government function that is actually valuable (almost an impossibility imho) would quickly be replaced by private business and rapidly become an order of magnitude more efficient.
We should scrap the whole government and start from scratch with the constitution as the basis. Even if we had to go for a year without public safety, we would be far far better off. I would even suggest that we would be better off to put any gubamint workers who can’t get a private job on basic lifetime welfare. They are less dangerous that way than incompetantly lording over us. Probably 30% or so of them would have to be taken care of because they simply can’t perform useful work after spending years becoming expertsa ta not doing things in the government.
Jobs are jobs until the public sector jobs disappear because there is no more profits to take from the private sector. Public sector jobs are always a luxury which is provided by private sector profitability. Therefore, if you are a collectivist, your bread and butter come from MORE PRIVATE SECTOR PROFITS. Chew on that a while, Obama boy. ABO2012
Rossp – Yes, we Republicans can believe as we like just as you, the Liberal, can believe what you like. That we believe you to be wrong and wrong-headed about big government and its role in correcting the spiraling out of control recession is without question as well. If we offend you, stay in your own circle – it won’t bother any of us to never, ever hear from you again.
If you didn’t like Mr. Blumer’s comments, why did you take the time to read them?
There will always be those Obamatons that still believe Obama is a leader, and then there are the rest of us. Lets hope the “rest of us” far outnumber the obamatons.
We need Mitt in Nov…
He’s in outer space!
What total BS.
All these graphs really show is that private sector employment is down.
Will firing teachers and policemen and firemen magically create private sector employment?
Only Republicans believe that it will, just as they believe tax cuts for the wealthy create American jobs, and that Wall Street is over-regulated.
TOTAL BS.
Hiring people into the government won’t create private sector employment either.
Today, the ratio of private sector workers to government workers has declined to only 4 to 1. (Back in the 1950s, it was at least 20 to 1.)
What kind of society will we have if we continue on your route, and one day the number of people employed by the government actually exceeds the number of people employed in the private sector? Add in retirees and poor people on welfare, and America will be a country in which only a minority of adults work in the private sector.
Then America will collapse. Right?
It is not government’s fault that private sector employment has declined. It is the private sector’s fault. No matter how little government you have, Americans will never compete for the millions of manufacturing jobs that have been steadily flowing overseas for the past decade and a half or so. There just aren’t jobs out there anymore in the private sector for everyone who wants one. Laying off tens of thousands of government workers will do nothing but further swell the unemployment numbers without any subsequent increase in private sector job opportunities.
What you really need to look at is the fact that the people at the top in the private sector have determined that it is far more profitable to 1) outsource jobs, 2) automate tasks that they used to employ people to do, and 3) do more with less people. As long as we continue to demand more and more profits from the private sector, available jobs will continue to drop as we find cheaper and easier ways to do things. It’s not enough anymore to make a comfortable living. You have to be filthy rich to be considered successful and, in order to do so, you have to screw over a good majority of the people who work to help make you successful. Greed is going to be our undoing and like all civilizations, we will falter, collapse, and a new one will be born.
Try to understand that the only way for Public Sector Jobs to Exist is if there are Private Sector jobs who have to pay Taxes so your job can happen.
In other words if there are NO Private Sector Job Taxpayers, there can not be any, (NONE) Public Sector Jobs, this only happens after Private sector pay taxes.
How will keeping government employees on the payroll help when you can’t afford the ones you have? How will you pay them, borrow money or raise taxes even more?
Second, there are a lot of government employees who aren’t teachers, policemen and firefighters. Why are they the only ones singled out every time there’s a need to cut the government payrole? How about some of the administration at school boards, police and fire departments, along with excess staff and administrators at the countless government bureaucracies? The whole “teachers, police and firefighters” line is the classic “Washington Monument” tactic where the first cuts go to the things that taxpayers support the most while the fat gets cut last.
To fire Public Sector jobs of any kind is a Tax Savings, at one or more taxing sources, Federal, State, County, or City.
The only thing that creates Private Sector Jobs Demands from paying customers,
or the hottest selling thing since the hula hoop, with new investment.
What the United States has, that the World needs, is Oil and Natural Gas.
Both create jobs on the site and near the site. Drill, Pump, Ship, Sell, each are jobs and near each site more jobs money sent home is more jobs.
What concerns me now is the closing of many oil refineries in this country and around the world, these jobs are going to third world countries, where disputes are often and stoppage could be costly.
It’s always the “teachers and policemen and firemen” that the left wants to talk about – never about the bureaucrats, clerks, and time-serving functionaries whose ranks were swelling before the financial blow-up.
Here’s a graph of what came before the recent slight drop in government jobs (slight compared to prior growth):
http://www.cato-at-liberty.org/growth-in-government-employment/
Do you really believe all of that job growth was teachers, police officers, and firefighters? Not likely. For years, in places like California, govt budget and the number of govt jobs both grew far faster than could be remotely justified by inflation and population growth. Now some of that fat is being trimmed and we’re supposed to believe that’s a disaster?
Wow, right out the gate with the biggest cliché of all, the old tax cuts for the wealthiest Americans dance. Would it really hurt your liberals to familiarize yourself with some basic math? 49% of the population DOESN’T owe any Federal Income tax on April 15th. Ergo, they cannot receive a tax cut. It is only liberal ‘fuzzy’ math that allows redistributionist policies to be considered tax cuts.
20% of the tax payers, i.e. those that do pay federal income tax, pay 67% of the federal tax burden. So any form of legislation that reduces taxes as a whole, is going to benefit them that pay the most. It’s pretty simple math, really, though I know it doesn’t jive with your desire to see people with money punished for having it.
Obama’s attempt to sell the American Private Sector TAX PAYER, the need for Public Sector Union Employees needed help to put Teachers, Police, and Firefighters back to work. Limiting it only to UNION Public Sector, was a dead giv-a-way. Obama Needs the Unions Help Financial Help for his re-election Campaign, and he needs the Union votes.
But to get the Unions Help Obama must saddle the Private Sector Taxpayers for a couple of more TRILLION DOLLARS of Debt to buy the Unions support at taxpayers expense.
I’m deaf and read lips to see what is said, I read Eyes and Facial Expressions to see what is meant.
Rule # 1. BE TRUTHFUL OR BE SILENT.
The truth of the matter, is that the private sector is doing fairly well. The top fortune 500 are sitting on so much cash that the amount/their balance sheets exceeds 5 trillion dollars at last count. The private sector banking and finance as well as the auto companies were the ones bailed out! Of course these sectors drive many parts of the economy.
The writer looked at only one aspect of the economy, jobs in government as compared to private sector, but I don’t believe the number are correct. If one wants to “blame” someone, the blame the banks, real estate moguals and the finance sectors for the mess we are in. . .government didn’t take everyone’s IRA, 401K, etc and go gambling in the stock market. Government didn’t create the housing bubble, nor did governmetn engage in the greed and avarice that caused so much of the misery. Government is not the ones dragging their feet on the foreclosure mess, which is essentially a private sector issue as it is the private banks, etc that issued all of these toxic mortgages.
Government employees do make gillions dollar salaries and bonsas for taking their departments to the brink of bankruptcy! Government employees do not get golden parachutes to leave and government employees have to actually work for the market-rate wage and salaried jobs.
Government employees are not the problem; the teachers are not the problem, the firemen and police are not the problem nor are the deparment clerks that wait on citizens seeking assistance and the road crews that fix pot-holes and build roads are not the problem. These folks do their work on behalf of ALL the citizens in the community and state and to say they have bloated wages is misleading and untruthful. They earn their pay and benefits.
Many do very dangerous and demanding jobs and should be paid accordingly. All public school teachers have at least a bachelor’s degree and almost 50% have master’s degrees and special certification for specialized skills. Should they not be paid an appropriate salary? Especially when they have senority in terms of longevity on the job.
This is a writer who is distracted and not in full control of his/her faculties. This piece needs to be trashed and start over.
Tom and others in the conservative media are using the President’s word choice to obscure the larger point that he was making, which is that the state of the job market is improving and would be better still if not for the state and local government layoffs caused by Republicans politicians. Reductions in aid to states and public employee layoffs will not lead to private sector job growth, and will actually increase the unemployment rate.
“state and local government layoffs caused by Republicans politicians”
No – the layoffs are caused by lack of money compared to what states and localities were raking in before the economic slump.
What really gets me is that “public sector” jobs are just recycled taxpayer dollars. Private sector jobs are from business and other monies. It makes no sense that so few can figure this aspect of the money cycle out.
I have read a lot of the comments on all kinds of blogs and news sources re this issue.Note what I say and feel free to repeat this everywhere this topic is discussed.When these states cannot get their act together IE California ,Illinois the bondholders will be the one to suffer and guess what,there are lots of muni bonds held by 401 private pension plans so not only are they screwing the tax payer going in their screwing them going away also. How come people are not talking about this as well.
Coming from obstructionist, sabotaging, do-nothing Republican biased sectors of the poopulation, this and other opinions are worth nothing. The biggest problem Republicans face is that they are able to fool just SOME of the people ALL of the time – try as they might to fool ALL.
How so, alf? Was this your opinion or do you just like to use cliches as arguments?
Alf read my comment and think about it a little.I know 401ks do not exist in mommy’s basement but there are investors in those states that concern themselves with effect of government runamok. Please educate yourself and look at things from both sides.
I have reviewed the employment statistics from the US Bureau of Labor Statistics and agree with those shown above. In fact since 2002 the US employment as measured by non farm payroll (from Table B-1)has added only 1,030,000 new jobs by the end of 2011 (9 years) of which 30% were federal non-postal service positions.
Yes, the President was correct in that the economy is “fine” if describing the 500 largest US Corporations (S&P 500). BUT, everyone agrees that small businesses create 70-80% of all new jobs and according to the NFIB all is NOT fine. For “the smartest man in the room” this statement was awful and callous.
Do-Nothing, Vacation-Loving, Golf-Addicted, Underemployed, Underachieving Candidate (for Reelection)
http://finance.townhall.com/columnists/johnransom/2012/06/08/donothing_vacationloving_golfaddicted_underemployed_underachieving_candidate_for_reelection
A report from our “favorite” TV channel shows things aren’t turning up very fast.
http://economywatch.msnbc.msn.com/_news/2012/06/11/12170847-report-shows-carnage-downturn-caused-to-families-net-worth?lite
Time for some people to face reality: http://modeltstocktrends.blogspot.com/2011/05/fantasy-island-meets-reality.html
Actually, a good number of private sector jobs are a result of government spending on contracts. If you want to see where a good chunk of your tax money goes, investigate how much money the private sector takes from the government in terms of overcharging, dragging out contracts, waste, fraud, abuse, etc. I bet you will find it to be over $100 billion.
No Ryan, these private sector contractors are just hurting themselves and other private sector workers because they are driving up the number of public sector workers. They would not be permitted to overcharge and drag out(etc) if they were contracting in the private sector to produce the same goods or services. You have just made the best argument for the elimination of public sector jobs. I hope that was your intention.
I must be missing something (that the rest of you are ignoring), but the graph clearly shows federal hiring on an upward trajectory before Obama was elected. That trajectory continued only into the fall of ’09 and has leveled off. And is the author proposing the non-sequitor of government jobs steal private sector jobs? The graphs don’t show that either. Your baseline shows private sector jobs crash while public sector jobs stay flat (federal trending up, states and local down). All it really shows is that government jobs don’t decline at the same pace as private sector during a recession. This probably explains the reason for the resentment, but the public sector is not the cause for the private sector’s losses.
your figures are incorrect if you focus on federal non-postal service employment. during the eight Bush years employment rose by an average annual rate of 1.47%. Under Obama this figure increased 15% to an average 1.7% per year. this doesn’t sound like much but when compared to the private sector job shrinkage during the same period (Obama’s tenure)it is very significant.
(figures from US BLS)
You seem to basically put these graphs up and then just argue whatever you want to. You claim the stimulus was ineffective despite the fact that you can clearly see that the inflection point of the graph where the job loss slows and eventually turns upwards is right around the stimulus. Indeed, your own graph shows employment is significantly higher now than it was when the stimulus occurred. You claim that the private sector is the biggest drag on the economy even though it has been increasing rapidly in jobs for over two years while the public sector has fallen. You claim based on absolutely nothing that Obama kept the jobs increase number from being higher. Just the silliest partisan hackery here.
Your vision needs some work. Maybe this chart will help.
I have been thinking about this issue of “government created jobs” and I believe what we need here is a clearer definition of what it means to create a job. The assumption in all these debates is that hiring someone to do something and paying them for it is the equivalent of creating a job. I disagree.
There needs to be consideration given to the nature of the job and whether it creates wealth that exceeds the payment to the employee or not. There also needs to be consideration given to the source of the funds used to pay the employee.
If no consideration is given to the wealth creating nature of the job, then schemes like the Soviet union hiring legions of street sweepers so they can claim full employment will be the result.
If no consideration is given to the source of the funds used to pay the employee, then a mob boss sending a thug to shake down local merchants for “protection” money can be said to be a job creator when no sane person would hold that view.
What about public sector jobs? Are there public sector jobs that create more value then they cost? Not to be cynical, but given the bloated benefits and the wealth-destroying nature of many of these jobs, I would guess there are probably very few. However, it is possible for there to be such jobs in the public sector that fulfill legitimate government functions such as the police, the military, and the courts given appropriate compensation packages.
Does that mean that the government can create jobs? NO! The funds to pay for government jobs are taken (by force) from taxpayers who have to create that wealth before the government can take it and use it to pay public sector workers. Therefore, the unwilling “job creators” for public sector jobs are the taxpayers, NOT the bureaucrats or politicians. The taxpayers are the ones who make it possible for those jobs to exist.