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An ominous trend: number of Americans working for the government vs. those making things

5 March 2010

Eric at the always-interesting Classical Values website revisited the FM website’s America passes a milestone! (20 January 2010), marking when the number of government employees exceeded those in manufacturing and construction.  Let’s update that, comparing workers in all good-producing industries to government employees.  From the Bureau of Labor Statistics:

  • Good-producing employment peaked in 2000 at 24.6 million.
  • Since then the number of goods-producing workers has dropped by 1/4, to 18.6 million.
  • In 2007 for the first time both groups were equal (22.2 million).
  • Since 2007 private sector employment has dropped by 7.0 million, over 1/2 of that from good-producing industries.
  • Since 2007 the number of government employees has risen by 2% (by 326 thousand).

The changes in employment during recession are typical.  Good-producing industries — mining, logging, construction, and manufacturing — are cyclical.   Government services are counter-cyclical, stable or increasing during recessions.

But the trend should send shivers up your spine.  Recessions create opportunities for reform.  Politics as usual stops.  Voters pay attention to these things more than during booms.  During the 1980-82 recession Fed Chairman Volker and President Reagan administered economic medicine that laid the foundation for the next quarter-century of economic growth.  So far the Bush and Obama Administration have wasted this time.  That’s bad news, since stimulus programs (monetary and fiscal) provide first aid only.  They fix nothing.  Treatment requires bold move by our Federal and States executives and legislatures.

Let’s encourage the government to act now.

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