Who Do You Work For?

[BridgeTroll]

http://online.wsj.com/article/SB10001424052748704050204576219073867182108.html

We've Become a Nation of Takers, Not Makers

More Americans work for the government than in manufacturing, farming, fishing, forestry, mining and utilities combined..

By STEPHEN MOORE

If you want to understand better why so many statesâ€"from New York to Wisconsin to Californiaâ€"are teetering on the brink of bankruptcy, consider this depressing statistic: Today in America there are nearly twice as many people working for the government (22.5 million) than in all of manufacturing (11.5 million). This is an almost exact reversal of the situation in 1960, when there were 15 million workers in manufacturing and 8.7 million collecting a paycheck from the government.

It gets worse. More Americans work for the government than work in construction, farming, fishing, forestry, manufacturing, mining and utilities combined. We have moved decisively from a nation of makers to a nation of takers. Nearly half of the $2.2 trillion cost of state and local governments is the $1 trillion-a-year tab for pay and benefits of state and local employees. Is it any wonder that so many states and cities cannot pay their bills?

Every state in America today except for twoâ€"Indiana and Wisconsinâ€"has more government workers on the payroll than people manufacturing industrial goods. Consider California, which has the highest budget deficit in the history of the states. The not-so Golden State now has an incredible 2.4 million government employeesâ€"twice as many as people at work in manufacturing. New Jersey has just under two-and-a-half as many government employees as manufacturers. Florida's ratio is more than 3 to 1. So is New York's.

Even Michigan, at one time the auto capital of the world, and Pennsylvania, once the steel capital, have more government bureaucrats than people making things. The leaders in government hiring are Wyoming and New Mexico, which have hired more than six government workers for every manufacturing worker.

Now it is certainly true that many states have not typically been home to traditional manufacturing operations. Iowa and Nebraska are farm states, for example. But in those states, there are at least five times more government workers than farmers. West Virginia is the mining capital of the world, yet it has at least three times more government workers than miners. New York is the financial capital of the worldâ€"at least for now. That sector employs roughly 670,000 New Yorkers. That's less than half of the state's 1.48 million government employees.

Don't expect a reversal of this trend anytime soon. Surveys of college graduates are finding that more and more of our top minds want to work for the government. Why? Because in recent years only government agencies have been hiring, and because the offer of near lifetime security is highly valued in these times of economic turbulence. When 23-year-olds aren't willing to take career risks, we have a real problem on our hands. Sadly, we could end up with a generation of Americans who want to work at the Department of Motor Vehicles.

The employment trends described here are explained in part by hugely beneficial productivity improvements in such traditional industries as farming, manufacturing, financial services and telecommunications. These produce far more output per worker than in the past. The typical farmer, for example, is today at least three times more productive than in 1950.

Where are the productivity gains in government? Consider a core function of state and local governments: schools. Over the period 1970-2005, school spending per pupil, adjusted for inflation, doubled, while standardized achievement test scores were flat. Over roughly that same time period, public-school employment doubled per student, according to a study by researchers at the University of Washington. That is what economists call negative productivity.

But education is an industry where we measure performance backwards: We gauge school performance not by outputs, but by inputs. If quality falls, we say we didn't pay teachers enough or we need smaller class sizes or newer schools. If education had undergone the same productivity revolution that manufacturing has, we would have half as many educators, smaller school budgets, and higher graduation rates and test scores.

The same is true of almost all other government services. Mass transit spends more and more every year and yet a much smaller share of Americans use trains and buses today than in past decades. One way that private companies spur productivity is by firing underperforming employees and rewarding excellence. In government employment, tenure for teachers and near lifetime employment for other civil servants shields workers from this basic system of reward and punishment. It is a system that breeds mediocrity, which is what we've gotten.

Most reasonable steps to restrain public-sector employment costs are smothered by the unions. Study after study has shown that states and cities could shave 20% to 40% off the cost of many servicesâ€"fire fighting, public transportation, garbage collection, administrative functions, even prison operationsâ€"through competitive contracting to private providers. But unions have blocked many of those efforts. Public employees maintain that they are underpaid relative to equally qualified private-sector workers, yet they are deathly afraid of competitive bidding for government services.

President Obama says we have to retool our economy to "win the future." The only way to do that is to grow the economy that makes things, not the sector that takes things.

[copperfiend]

I would feel more secure working for the government than a private industry. The government isn't going to close up shop and move to India.

[finehoe]

At least the government provides services to people.  How many people work in the financial industry which does little but leech off of all other sectors?

[JeffreyS]

The best way to increase manufacturing here is a slight increase in tariffs.

[BridgeTroll]

Wow... really?  Maybe this should be a poll question.

[finehoe]

This is the real problem with our economy, not how many people are employed by the government:

[BridgeTroll]

Does that site have a graph comparing manufacturing vs government jobs?

[uptowngirl]

At least the government provides services to people.  How many people work in the financial industry which does little but leech off of all other sectors?

LOL, the government leeches off our tax dollars....it is an endless cycle of leeches.

[finehoe]

LOL, the government leeches off our tax dollars....it is an endless cycle of leeches.

At least you benefit from those tax dollars being spent on protecting your food, preventing planes from running into each other mid-air, ensuring your water is safe to drink, etc.  How are you benefiting when a banker skims a fee off of you transfering your own money somewhere or when a stockbroker charges a fee for you buying a stock?

[finehoe]

Does that site have a graph comparing manufacturing vs government jobs?

This is from a different site, but I think it's what you want to see:  http://fabiusmaximus.wordpress.com/2009/01/20/milestone/

[uptowngirl]

LOL, the government leeches off our tax dollars....it is an endless cycle of leeches.

At least you benefit from those tax dollars being spent on protecting your food, preventing planes from running into each other mid-air, ensuring your water is safe to drink, etc.  How are you benefiting when a banker skims a fee off of you transfering your own money somewhere or when a stockbroker charges a fee for you buying a stock?

So you can move your money to mexico or india on your own? A plane ticket costs a lot more than a wire fee. You can buy and sell stocks on your own- just get a license, it is a lot of studying and a pretty big fee. You can also purchase a house with cash, but you will still pay the tax and filing fees. It is all about what you feel you should be paying for- you can decide that on your own in the private sector, but are stuck with the government even if you don't want it, like it, or use it.

[finehoe]

It is all about what you feel you should be paying for- you can decide that on your own in the private sector, but are stuck with the government even if you don't want it, like it, or use it.

No, it's all about how productive is it to have a country that doesn't produce anything and instead tries to base its economy on shuffling money around, with a parasitic class sucking a portion of that money out at each transaction.  We have an illusion of "growth" and "wealth" that has been created by the FIRE economy in which shuffling paper and bits of data pass for actual productive activities when in fact they created nothing.

[CG7]

I work for a manufacturer based here in J'ville. We sell our products all over the world, by providing a superior product and customer service. We aren't adding jobs, but we aren't cutting them either. The average worker has been here 15 years (27 for me). I just wanted to let people know there are still a few of us out there, and we aren't going anywhere.

[BridgeTroll]

This is more stark than even the WSJ article...   Thanks fineho...

[Timkin]

At least the government provides services to people.  How many people work in the financial industry which does little but leech off of all other sectors?

LOL, the government leeches off our tax dollars....it is an endless cycle of leeches.

+1,000,000,000,000,000  Fine