01 December 2009

A Decade Without New Private Sector Jobs

The 2001 tech bust destroyed jobs equal in number to all the jobs created since 1999. The current recession has destroyed jobs equal in number to all the jobs created since the tech bust. Thus, there are about the same number of private sector jobs in the economy now as there were in 1999. In the same time period, about two million new public sector jobs have been created.


Michael Malak said...

The more people that work for the government, the more difficult it is to challenge government.

andrew said...

Keep in mind that there is no such thing as "the government."

Instead, there are lots of governments (tens of thousands of them), and even governments that we sometimes think of as single entities, like the State of Colorado or the United States Government have many large parts that are subject to some form of market discipline and/or do not report to the chief executive of that govermental entity. Some private entities, in contrast, like HOAs, look a lot like governments but aren't classified as governments.

The lion's share of government employees work in entities whose job is to spend collectively collected funds for a public purpose (e.g. school districts, parks departments, the TVA, the USPS, library districts, SCFD, stadium districts, RTD, Denver Water, hospital districts, public colleges and universities) that have little or no regulatory power unique to a governmental entity. From an individual citizen's perspective, a publicly owned school or hospital is no different than a privately owned one, and whether services like water and trash collection are provided by a public entity or a private utility is basically invisible and largely a matter of historical happenstance. Many of these entities don't even have meaningful governmental immunity from lawsuits.

On the other hand, there are private corporations (e.g. government contractors and government owned entities) over whom a chief executive of a governmental entity may have more direct control than many governmental units within that entity.

It is easier to challenge government now than it has been at any time before the 1960s, and in countries where the government sector is far larger (e.g. France) it is actually considerably easier to challenge government than it is in countries will smaller governments.

andrew said...

P.S. Now that I have a gmail account, the name attached to my comments varies a bit if I don't pay attention. They're all me.

Michael Malak said...

My own frustration stems from my own career in software development. With the advent of Bush-now-Obama wars, it's harder to find software development work outside the defense industry. And a major problem with working in the defense industry is the need for a security clearance, with its restrictions on international travel, and most importantly, restrictions on free speech.

I was one of the major anti-war bloggers in the 2002-2004 timeframe (running underreported.com). There is no way I could have done that had I worked for the defense industry.

Instead at the time I worked for Fannie Mae, which was little better. Instead of working to bomb civilians, it turns out I was working to bankrupt the economy and starve them instead. And now we know from experiencing the bailouts that Fannie Mae was just as quasi-governmental as it was rumored to be.

Local and state governments are so dependent upon the federal government for funding that the distinction is not as large as you make it to be. No employee of a local or state government acting in self-interest would criticize the federal government.

Anonymous said...

And how much has local/state/fed g'ment expanded in the last ten years? How many new hires have been added to various g'ment payrolls over the last 10 years?

I saw a statistic the other day that said the average pay for a private sector employee was around 69K, and the average salary for a PUBLIC sector employee was almost 120K. Something is definitely wrong with this picture, and I believe it's all happened in the last 10-15 years.

When I was in college, the meme was that public sector work didn't pay as much, but you had job security and decent benefits.

I wonder how much money would be saved and how much state budget deficit would be saved by aligning public sector salaries with there private sector equivalents.

andrew said...

The public sector has added two million jobs in the past decade. About one in six jobs is in the public sector.

An average pay of $69K sounds high for an average private sector job. An average pay of $120K for a public sector job is definitely wrong - public sector pay is a matter of public record. Even public sector doctors, lawyers, law professors and senior managers make around $120K, but your average public sector teacher, bureaucrat, cop, fireman, park ranger, soldier, and professor makes less. The OPM website will tell you exactly how many people in the federal government are in each pay grade and federal government workers tend to be at the high end of public sector pay.

Anonymous said...

So 1 in 6 working people work for a g'ment entity in some manner? That seems like a pretty large expansion. I wonder what that number was in 1990 or 1970..

It might have been just federal employees that average 120k. Regardless, my point is that we're paying a lot more for public sector employees than we probably should be.

As a jeffco resident, I know there are many county employees at the 100K range that probably could not make close to that in the real world..