Iain Murray of the Competitive Enterprise Institute has put together a very depressing column for National Review. To put it bluntly, he exposes the true size of the federal workforce, which has 5.5 hidden employees for every official bureaucrat.
Officially, as of 2009, the federal government employed 2.8 million individuals out of a total U.S. workforce of 236 million — just over 1 percent of the workforce. …Add in uniformed military personnel, and the figure goes up to just under 4.4 million. There are also 66,000 people who work in the legislative branch and for federal courts. That makes the figure around 2 percent of the workforce. Yet even that doesn’t tell the full story. A lot of government work is done by contractors or grantees — from arms manufacturers to local charities, from environmental-advocacy groups to university researchers. …Unfortunately, we can’t ask the Office of Personnel Management (OPM) how many government contractors and grantees there are. They don’t keep such records. …Instead, we can ask Prof. Paul Light of New York University, who has estimated the size of these shadowy branches of government. As he points out, while there are many good reasons for the government to use contractors (should the feds really be in the business of making dentures for veterans, as they were until the 1950s?), the use of contracts and grants also hides the true size of government…By 2005, the federal government employed 14.6 million people: 1.9 million civil servants, 770,000 postal workers, 1.44 million uniformed service personnel, 7.6 million contractors, and 2.9 million grantees. This amounted to a ratio of five and a half “shadow” government employees for every civil servant on the federal payroll. Since 1999, the government had grown by over 4.5 million employees. Professor Light’s figures are from 2006, but there can be little doubt that the size of the federal government has increased still further since. There are those new contractors and grantees working on “stimulus” projects to add. Then there are the employees of bailed-out and partially nationalized firms: General Motors (still owned in large part by the government despite the sale of stock in November 2010), AIG, and a large number of banks. GM alone employs 300,000 people. …Even if it grew at the same rate as it did between 1999 and 2005 (a conservative assumption), that would suggest a further 4.7 million employees dependent on taxpayer funding since 2005, bringing the total true size of the federal government to just under 20 million employees.
The video below also discusses the hidden or shadow bureaucracy (albeit briefly, around the 1:00 mark). The main focus of the mini-documentary is how bureaucrats are grossly over-compensated compared to workers in the productive sector of the economy. So the overall message is that there are far too many bureaucrats and they are paid way too much.