United Liberty

As has been pointed a couple of times this week, President Barack Obama has said that the “private-sector is fine” and that the real lag in jobs comes from the state and local governments. The comments are scary in that Obama does seem to grasp that the private-sector is where the real strength of our economy is and that regulations and mandates are causing lagging job growth. But what of the substance of his claim? Obama is wrong, according to Ed Carson at Investors Business Daily:

Private-sector jobs are still down by 4.6 million, or 4%, from January 2008, when overall employment peaked. Meanwhile government jobs are down just 407,000, or 1.8%. Federal employment actually is 225,000 jobs above its January 2008 level, an 11.4% increase. That’s right, up 11.4%.

Private payrolls have been trending higher in the last couple of years while government has been shedding staff. But that’s because governments did not cut jobs right away. Overall government employment didn’t peak until April 2009, 16 months after the recession started. It didn’t fall below their January 2008 level until September 2010.

The recession was boomtime for federal employment, especially after Obama took office. Federal jobs kept rising (excluding a temporary Census surge in early 2010) until March 2011 — more than three years after overall payrolls peaked.

Obama’s 2009 stimulus did little to revive private jobs, but did funnel massive funding to state and local governments. That, however, only delayed the day of reckoning for states and cities to curb spending. They finally did significantly slash jobs in 2010 and 2011. But those layoffs have slowed to a crawl in recent months — averaging less than 3,500 job cuts a month since November.
[…]
Payroll change since January 2008

Total: -5.01 million  -3.6%

Private: -4.61 million  -4%

Government: -407,000  -1.8%

Federal Government: (excluding post office) +225,000  11.4%

Now, the numbers are skewed due to the growth in federal employment. But Jim Geraghty gets more specific regarding cuts to public safety and teachers, noting that the cuts haven’t been all that dramatic, if even at all:

The most recent Bureau of Labor Statistics figure we have for employment in the categories come from 2011:

“Justice, public order, and safety activities”: 2,820,000

“Elementary and secondary schools”:  8,524,000

In 2009, the totals were:

“Justice, public order, and safety activities”: 2,880,000

“Elementary and secondary schools”:  8,884,000

So in two years, the category that would include firemen and police is down 2.1 percent, and the category that would include teachers is down 4.1 percent.

So, what’s gone on while these employment groups have declined slightly? Well, local government as a whole hasn’t shrunk much at all.

Right now, the Bureau of Labor Statistics lists the number of government employees, excluding education, as 6,246,000.

Ten years ago, the total was 6,065,000. The peak was 6,505,000 in July 2009 — right after the worst of the recession, ironically. (Perhaps this was driven by the stimulus-bill spending.) So we’re only down about 250,000 local employees from the peak; the current total is 96 percent of the peak employment.

But from 2005 to 2007 — economic boom years, compared to what we’ve endured in recent years — the total number of local-government employees surpassed 6.4 million only three of the 36 months. So local governments have about the same number of employees as they did before the recession hit.

In other words, Obama seems to think that the recent peak of local employment is the “normal” level, and that any drop from that is an economic problem to be solved. The notion that the very modest reduction represents localities adjusting their number of employees to a level they can sustain with their post-housing-boom tax base never seems to enter the picture.

(Oh, and these workers have seen compensation increase during the recession years: “Compensation costs for state and local government workers increased 1.5 percent for the 12-month period ending March 2012. In March 2011, the increase for the 12-month period was 1.8 percent.”)

What’s more, state spending has increased even during tough economic times, which indicates that many governments have been hoping for more federal dollars to soften the blow of lagging revenues. In other words, Obama values growth in government jobs more than the private-sector. He’ll defend it even though the evidence proves the assertion to be ridiculous. But you already knew that.