Has Government Grown Since the Recession Started?

Many conservatives and small-government advocates have made the case that the number of government employees has increased or, at least, that they are in a better situation than private sector employees during this recession. Paul Krugman of the New York Times wants them to admit that it is not true.

If you read what right-wingers say about the economy — and even alleged moderate conservatives, like Tim Pawlenty — you see, over and over again, the assertion that under Obama, government employment has risen sharply even as private employment has fallen. And you even get numbers, like Pawlenty’s assertion that 590,000 public sector jobs have been added. Yet the data say otherwise. What’s going on?

What’s going on, he says, is that conservatives are blinded by their ideological bias and fail to understand that growth in public employment was only the product of “the Census, which temporarily employed a lot of people, as it does every decade.” He even points to a piece I wrote on this blog about the growth in the size of government as evidence of such biases. Never mind that this blog post was written back in July and was correct about the number of government jobs created back then. Never mind that the point in my blog post was that the stimulus, which we were told would create 3.5 million jobs, 90 percent of which would be in the private sector, had failed on both counts. Most of the jobs reported created on Recovery.gov were government jobs, and that has consequences.

Note that he doesn’t question the number of government jobs created from January 2008 to June 2010 that I gave back in July; he just claims that these jobs were only a temporary increase in the federal workforce due to Census workers. To be sure, once the temporary Census employees were let go, the number of jobs that the government added to its payroll since the beginning of the recession went down considerably.

Yet, back in July, the Census was not the only factor explaining the gain in public employment. In fact, Krugman has a chart in his blog post (copied below) that shows public employment growing long after the beginning of the recession and independently of the Census boost. As we can see on this chart, government employment grew throughout 2008 until April 2009. By the end of the recession (shaded areas on the chart), and in spite of a drop at the end, government employment was much higher than when the recession started. Interestingly, we see that during both recessions — 2001 and 2008 — government employment grew significantly. Based on the Bureau of Labor Statistics, between January 2008 and April 2009 (the height of public employment since the start of the recession) public employment grew by roughly 300,000 jobs. During that time, the private sector shrank by 6.7 million jobs.

After April 2009, we see that government employment goes down slightly, and then back up in April 2010 because of the Census. However, it is only since August 2010 that the total number of government employees is lower than it was in January 2008. Overall, the public sector shrank by 118,000 jobs (0.5 percent of the January 2008 workforce). As a reminder, the private sector lost 7.2 million jobs (over 6 percent of its January workforce) during that time. I am pretty sure private sector employees would have rather experienced a different government employment trend than the one they experienced.

Also, I bet that employees would have loved if the private sector followed the trend in federal employment. BLS data shows that since January 2008, the federal workforce has grown by 98,000 jobs, even after temporary Census employees had been let go. Not bad during a recession. State employment grew by 42,000 employees. It is local governments that have been cutting jobs, almost since the beginning of the recession. They cut 258,000 jobs. As a reminder, the total private sector has lost 7.2 million jobs since January 2008.

So let’s recapitulate:

Private sector: -7.2 million jobs (6 percent of the January 2008 workforce)

Total government: -118,000 jobs (0.5 percent of its January 2008 workforce)

Federal government: +98,000 jobs (a 3.5 percent growth since January 2008)

State government: +42,000 jobs (less than 1 percent growth since January 2008)

Local government: -258,000 jobs (1.7 percent of its January 2008 workforce)

Of course, we can argue over how much the government grew during the recession or whether Obama is technically responsible for the shrinkage or growth of some or all parts of government. However, it is reasonable to say that, in contrast to the private sector, government employees have been relatively sheltered since January 2008: Only a small portion of local governments’ workforce lost their jobs and federal and state employment grew. It is also reasonable to say that for almost a year-and-a-half, while the private sector was shrinking, the government was growing. These are the points I think governor Pawlenty was trying to make.

Moreover, contrary to Krugman’s claim, the data shows that there is much more behind the growth of the federal workforce than the Census hiring of last spring. The remaining growth in federal employment is independent of the Census (and so is the loss in local government jobs.)

Thanks to Gerard Alexander for the pointer.

Veronique de Rugy — Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

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