Archive for July 17th, 2009

The Washington Post has a “feel-good” story about how the huge expansion in the federal government has created a relatively strong job market in the D.C.area. The story mentions that the federal workforce will expand by another 200,000 during the Obama years, yet at no point does the author bother to mention (or perhaps does not even understand) that all these new bureaucrats are financed by draining resources from the productive sector of the economy:

They came in droves wearing dark suits and carrying résumés yesterday — some lined up for a block in the hot sun waiting for the doors to open — to the only employer in this dismal economy hiring by the thousands: the federal government. More than 6,000 people jammed into the National Building Museum in Washington to apply for openings at 75 agencies, including the departments of Treasury, Homeland Security, Justice, Veterans Affairs and Energy. …in the government, added Shipp of Silver Spring, “you get stability, you get great benefits and [an opportunity] to move up and progress in your job.” The federal government represents about one-third of the Washington region’s $401 billion economy. Some analysts said they think the ramp-up in federal hiring and spending will help the area emerge from the recession before most other metropolitan regions. From May 2008 to May 2009, the region lost 55,000 jobs. But during that same period, nearly 20,000 jobs were created, mainly in the federal government and federal contracting sector. …The Partnership for Public Service, a nonprofit that sponsored the job fair and is surveying federal agencies to determine their staffing needs, estimates that the government will hire about 600,000 people over the next four years, as many as 120,000 of whom would work in the Washington region. The federal workforce, currently at 1.9 million, is expected to grow to about 2.1 million during the Obama administration, according to the Partnership for Public Service. That is comparable to the staffing level during the Johnson administration’s Great Society programs of the 1960s.

One of the most shockingly inaccurate parts of the story is the assertion that pay for bureaucrats does not match the private sector. Actually, that statement is technically true, but in the opposite sense of what the reporter writes. As Cato’s Chris Edwards has noted, compensation for bureaucrats is far above levels in the productive sector of the economy:

While the government currently cannot always match private-sector salaries, job seekers say it can offer something else: stability in an unsteady economy, a sense of mission and, in some cases, student loan forgiveness and tuition reimbursement programs.

Last but not least, the story inadvertently concludes with a perfect example of how bloated government hurts growth. It quotes a student who is angling for a job in government rather than doing something productive. We have no idea what Mr. Moore would wind up doing in the absence of a federal sinecure, but even a job at McDonald’s would mean contributing to national income rather than diverting it to unproductive uses:

Alexander Moore, 22, who recently graduated with an economics degree from the College of William and Mary, said he hopes the Bureau of Economic Analysis will hire him and help pay for a master’s degree. “If you would have asked me six to eight months ago [about his employment preference], it would have been the private sector,” Moore said. “Now it’s the public sector, because it’s becoming a bigger part of our society.”

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