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The Recession’s Fat Cats: Public Employees

• Veronique de Rugy

Last week, the Huffington Post (here) was all over this  new study showing that low-income workers got hit more severely during the recession than high-income workers (low-income workers suffer an over 30 percent unemployment rate, workers making about $138,000, only a 3.2 percent.)

The data in this study, which turned out to be quite misleading, certainly makes for nice populist headlines. But it is hiding the true debate that we should be having. And that’s not that low-skill workers are vulnerable to recession (duh) but that public-sector employees still have jobs and private employees don’t.
. . .

In this chart, I compare seasonally adjusted unemployment rates across segments of the economy, dividing these segments using the super-categories designated by the Bureau of Labor Statistics. The chart compares the unemployment rates in January of 2009 (blue) with the unemployment rates in these same sectors a year later (yellow). (FYI, the difference would be even more dramatic if I had used not seasonally adjusted data)

In both years, the unemployment rate within the government has been small relative to the level of unemployment within the entire economy, and particularly so relative to the private sector.   In the course of a year, government employment has decreased by 296,000 jobs to 4.3% unemployment; during the same period, employment in the private, non-agricultural, sector has decreased by 2.3 million jobs to 11.1%. (And if you look at not seasonally adjusted unemployment data, the lose of private jobs reached 3.1 million and the lose of public jobs is roughly 70,000. That’s quite a gap.)


1 Comments in Response to

Comment by Ross Wolf
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53% of Federal, State and Local Employees are unionized. Many are paid twice the amount of taxpayers working in the private sector. The U.S.  is  fast moving in the direction that caused the former USSR to collapse, imploding numbers of government bureaucrats. Ordinary Soviet Union Citizens not working for government barely earned enough money to buy food, while Soviet government workers were paid well and had lots of perks. In the U.S. despite the horrific recession, most government employees have not been adversely affected economically compared to U.S. Citizens working in the private sector. In addition to federal employees, state and local government employees have received pay increases and supported raising property taxes to ensure their government jobs and perks stay in tact. Meanwhile millions of U.S. Citizens appear destined for soup-lines. Considering the high salaries paid government, state and local employees, in many cases two government employees could be hired for the salary of one.  Candidates running for government office should include in their campaign issues cutting the salaries of certain government bureaucrats to help cut federal deficits.

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