Public Sector Employment Grows Despite Downturn

In the midst of the current economic downturn, there is one group that seems to be prospering: public employees. While the private sector is struggling to grow and create new jobs, government jobs are doing quite well.

This week’s chart by Mercatus Center Scholar Veronique de Rugy shows the growing number of government employees (all levels). Using the latest data for annual government employment from the Bureau of Labor Statistics, the chart shows that relentless growth in public sector employment largely overshadows private sector employment.

In 2010, there were 22,482,000 government employees. That’s an increase of 1,692,000 employees since 2000. During the examined time period, public employment has grown at an average rate of 0.8% each year—in contrast to the -0.3% average annual rate of private employment decline. From 2000 to 2010, the plummeting employment has been concentrated in the private sector. A total of 3,658,000 private sector jobs have been lost. All the while, public employment continues to increase.

Although government spending has a visual effect, it merely rearranges jobs temporarily and does not provide fuel for the engine of real economic growth. Public employment crowds out private employment and increases overall unemployment by offering comparatively attractive working conditions and fringe benefits. By ignoring the consequences for the private sector, efforts to increase job creation through stimulus will translate as a cure worse than the cause.

Veronique de Rugy blogs about the growth of public employment in regulatory agencies at NRO’s The Corner.