We’ve been talking about how this Great Recession, and its aftermath, represents a private-sector recovery and a public-sector depression. We haven’t seen government payrolls get slashed this deeply in some time in America. In fact, we now have statistics to put to that, courtesy of Jordan Weissman at the Atlantic. He looks at the ratio of government employment – at the local, state and federal levels – to the US population, and finds that the ratio is at its smallest point since 1968. That’s displayed in the chart above.
In 1968, we were just at the beginning of delivering Medicare and Medicaid. We had a smaller government sector in terms of the services they provided. But now, we have the same ratio of government employees to the population doling out that larger amount of services, and performing that larger amount of tasks. It’s impossible for this to lead to anything but a poorer provision of those services, and poorer performance of those tasks.
And who does this hurt? The most vulnerable segments of society, who inevitably qualify for more government services. Slashing government in this fashion inevitably rebounds back on the poor and the sick and the weak. But it also hurts the broader economy. The Hamilton Project, a centrist think tank, estimates that, if we had the same level of government employees to population that we had in 2007, we would have 1.7 million more workers on the job today. That’s enough to bring the unemployment rate down at least a full point, and probably closer to an even 7.0%.
And while this cutback of the government sector has slowed down, it still registers in negative territory; in the most recent employment report, government lost another 9,000 jobs.
This is the economy that conservatives claim to want, saying that slashing government spending – and inevitably that means government jobs – will free up the private sector to innovate and strive, and create jobs. Yet that hasn’t happened in any meaningful way. This conservative fantasy has failed.