In light of Paul Krugman’s suggestion that we’re suffering from a dangerous dearth of public employees, Steve Malanga writes the following:
What he ignores in particular is that state and local governments have been on a hiring spree since the Reagan years and that employee head count and expenditures, especially for items like pensions and health benefits, have soared relative to the growth of the population that government serves. One result is that local government in America was headed for an inevitable retrenchment and that federal stimulus, like the $200 billion that Washington sent states’ way in 2009, only put off the day of reckoning.
Krugman says that if local government were growing at the rate of the Reagan recovery we’d have some 1.3 million more “schoolteachers, firefighters, police officers, etc.” To Krugman it seems inconsequential whether we need those additional 1.3 million government workers.
As Malanga goes on to argue, maintaining high levels of public employment is an expensive proposition. And it’s not clear that it is the only way to deliver high-quality public services.