Politics & Policy

The Public Sector Is Doing Fine

Americans have endured 40 consecutive months of unemployment above 8 percent.

Sometimes a picture is worth six words.

“The private sector is doing fine,” may be the single sentence that finally sinks this most logorrheic of presidents. Coming just one week after unemployment ticked up from 8.1 to 8.2 percent, President Obama’s June 8 press-conference remark seemed spectacularly uninformed, if not staggeringly callous.

One would not expect a president of the United States in a tough reelection bid to utter something on today’s No. 1 issue that could be refuted almost effortlessly.

The chart below, produced by the Heritage Foundation’s John Fleming and James Sherk, confirms that the public sector is doing fine.

The private sector? Not so much.

Through May 2012, among those ages 16 and over, private-sector employment remains 3.9 percent lower than where it stood when the Great Recession commenced in December 2007. This is an improvement over early 2010, when that figure bottomed out at negative 7.6 percent. Still, private-sector employees have suffered significantly as compared to government workers.

Local-government employment is off by 2.8 percent, and state-government employment is down by 1.3 percent. This demonstrates that some mayors, city council members, governors, and state legislators have tightened their belts through America’s economic doldrums.

Uncle Sam’s situation, however, is completely different. Since December 2007, federal civilian employment has ballooned by 11.6 percent, not counting temporary Census workers. Rather than tighten his belt, Uncle Sam has removed it, unbuckled his trousers, and let his jolly belly flop, Buddha-like, right onto his knees.

In an outstanding Washington Post piece on Monday, Marc Thiessen explained just how fat and happy the public sector really is.

While Americans have endured 40 consecutive months of unemployment above 8 percent (all under Obama), joblessness among those who consider themselves professional government workers is just 4.2 percent, hardly half of today’s 8.2 percent national unemployment rate. As the Bureau of Labor Statistics reports, every other major “industry and class of worker” lags behind government employees. The self-employed are enduring 4.9 percent joblessness (did these people fire themselves?), while those in financial services (5.1 percent), manufacturing (7.1 percent), wholesale and retail trade (8.1 percent), agriculture (9.5 percent), and construction (14.2 percent), all are in deeper agony. 

Obama’s $828 billion “stimulus” was supposed to keep unemployment below 8 percent. Instead, it stubbornly has stayed north of 8 percent for the longest sustained interval since at least 1948, when the government began tracking this statistic. Roughly 83 percent of a trillion dollars has bought America nothing. 

On the Weekly Standard’s website last Friday, Jeffrey H. Anderson examined the employment-population ratio. This employment rate may be more informative than the unemployment rate, since the latter excludes people so disgusted, dejected, or defeated in their job searches that they simply stop seeking work. The employment rate only includes workers; its complement totals all nonworkers.

Today’s employment rate is 58.6 percent. As Anderson explains, it stood at 57.6 percent in 1956. Thus, Obama has presided over job numbers barely ahead of those that defined the Eisenhower era. “Under every other president in the past quarter of a century, the percentage of Americans who’ve been employed has always been over 60 percent — even during the most recent recession,” Anderson writes.

Until March 2009, two months after Obama arrived, July 1985 was the last month that the employment rate was under 60 percent, just as the Reagan recovery powered forward and left high joblessness behind. Under Obama, the employment rate has stayed below 60 percent for 39 straight months, with no end in sight. 

Most staggering about all of this is that in 1956, most women stayed at home and raised children. In spite of the feminist revolution and decades of women entering and even leading the work force, Obama’s employment levels resemble those in America before Mad Men

Meanwhile, as data brought to my attention by American Enterprise Institute resident scholar Andrew Biggs indicate, government workers are out-earning their private-sector counterparts — from City Hall to Capitol Hill. 

In the most recent report from the Bureau of Economic Analysis, private-sector employees averaged $62,757 in total compensation ($51,986 in wages and $10,771 in benefits). State and local government workers averaged $71,147 ($53,613 in wages and $17,533 in benefits). Those lucky enough to work for Uncle Sam typically made $119,931 ($79,370 in wages and $40,561 in benefits). That is 91 percent more than those in the private sector.

(For further analysis on this phenomenon, please click here.)

Nonetheless, Obama claims that “the private sector is doing fine.” The real problem, he says, lies elsewhere. “Where we’re seeing weaknesses in our economy have [sic] to do with state and local government — oftentimes, cuts initiated by governors or mayors who are not getting the kind of help that they have in the past from the federal government and who don’t have the same kind of flexibility as the federal government in dealing with fewer revenues coming in.”

Ah, yes, the indignity of governors and mayors being restrained by balanced-budget laws and deprived of presses to print — or quantitatively ease — money.

Thanks to Obama’s jaw-dropping words, many observers call him out of touch. 

Out of touch? Try out to lunch. 

— New York commentator Deroy Murdock is a nationally syndicated columnist with the Scripps Howard News Service and a media fellow with the Hoover Institution on War, Revolution, and Peace at Stanford University.

Deroy Murdock is a Manhattan-based Fox News contributor, a contributor to National Review Online, and a senior fellow with the London Center for Policy Research.


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