With each new round of employment numbers, Matt Yglesias reminds us of his “conservative recovery” thesis, i.e., that we’ve seen private sector job growth and public sector layoffs during the meager recovery. According to Matt, this is what conservatives want (true in a sense) and that it is a bad thing (it depends).

When we see a graph of public sector layoffs from January to May of this year, it reminds me that I’d really like to see a graph that traces the trend in private and public sector hiring over the last ten years. And what you’ll find is that private sector job growth hasn’t been particularly healthy for a decade and that public sector hiring was robust in the years before the financial crisis.

Public sector hiring is multifaceted. Increasing the number of bodies on the public payroll can be expensive and it can be relatively cheap. For a variety of reasons, elected officials have tended to emphasize deferred compensation and non-cash compensation over wages. The voting public has pressed for a sharp reduction in student-teacher ratios, thus increasing the number of teachers and diluting the teacher talent pool at a time when the country as a whole was going through an educational attainment slowdown. One could argue that hiring fewer teachers at higher salaries might have yielded better educational outcomes, i.e., we may have passed a point of diminishing returns in expanding the number of teachers.

I’d suggest that public sector employment levels, or more to the point public sector compensation bills, reached an untenable level in many states. Layoffs are not the only way to pare back the public sector compensation bill. In March, Josh Barro of the Manhattan Institute offered a guide to how state and local governments could manage employee costs. Unfortunately, many of these reforms have met with resistance from politically vocal public employees, thus putting many state and local officials in a bind.

Was it conservatives who opposed giving state and local governments new and better tools to manage employee costs? In some cases, I’m sure the answer is yes. But in most cases, I’m guessing that the answer is no, and this of course is one strategy that could have mitigated the public sector employment losses that Matt laments.

I’d also tentatively suggest that we’d see a higher level of private sector job growth in a state with a stable tax burden and an efficient public sector. Part of the problem with deferred compensation costs is that states didn’t plan for them terribly well, which meant that state governments had to raise taxes or pare back costs. And voters have been resistant to tax increases, in part because growth in net disposable income has been sluggish for middle-class families in recent years. Yes, we could raise taxes on the most affluent households. But this tends to increase the volatility of the tax base, which in turn encourages over-hiring in flush periods.

In a perfect world, the political incentives to over-hire at the peak of a business cycle would have been much weaker from the start, the public sector workforce would be smaller, more productive, and would receive higher cash compensation rather than large defined benefit pensions, etc. We don’t live in that world. Rather, we live in a world in which state and local governments are badly in need of structural reform, and people tend not to be interested in imposing painful structural reform when public coffers are full.

While I appreciate the appeal of Matt’s narrative, my guess is that a real conservative recovery would have looked very different. We’d certainly have seen either public sector layoffs or a sharp decrease in the public sector wage bill through other means. But we might also have seen, say, deeper payroll tax relief tied to entitlement cuts and other measures that might have helped sustain higher employment levels.