Wednesday, January 21, 2009

Interesting Charts of the Day

The chart above shows the monthly employment levels since 1969 in: a) the construction and manufacturing sectors combined, and b) government. Back in 1969, there were almost 2 manufacturing and construction jobs for every government employee. Since then, government employment almost doubled from 12 million in 1969 to almost 24 million today, as manufacturing and construction jobs have remained flat and have recently fallen, to the point that there are now more workers employed by government than are employed in the manufacturing and construction sectors. A version of this graph was posted here and here (thanks to Tim Wise).

But before getting too depressed about that trend, I decided to check something else: Government employees as a percent of total nonfarm employment, and the interesting results are presented here:

As the chart shows, there has been a general downward trend in government employees as a percent of total payrolls since the mid-1970s, from more than 19% in 1975 to below 16% by 1998, with a slight reversal of the trend since 2000.

As much as we hear about the growth in government, it seems like the jobs data tell a different story. Comment welcome.

One explanation for the top chart is that there have been so many productivity gains in manufacturing that we can produce increasingly higher levels of output over time with fewer and fewer manufacturing workers?


22 Comments:

At 1/21/2009 10:00 AM, Blogger Ken said...

Regarding the second chart - could this also be explained by an increase in the use of contractors by the government rather than payroll employees?

 
At 1/21/2009 10:12 AM, Anonymous Anonymous said...

Do these stats count military as government employees? I ask because during the 2000 campaign Al Gore claimed that the Clinton administration had reduced the number of government employees. A claim he was only able to make because they had cut the standing military in half.

 
At 1/21/2009 10:22 AM, Blogger wcw said...

Yes, they do. Parenthetically, you talk about Clinton reducing military spending like it's a bad thing. "Our long nightmare of peace and prosperity is finally over," indeed.

On-topic, manufacturing productivity has always been the silent culprit for blue-collar job loss. Those jobs aren't so much going to China (though some are) as gone. Year upon year, it takes a lot fewer men to produce a widget.

And ceteris paribus, that's a good thing. It'd just be nice if government shouldered the collective-action burdens that said productivity increases carry with them.

As for the government sector, try normalizing for GDP (XLS, .gov site). We're at 15% GDP on-budget now, versus 18% in 1968 (and 44% in 1943 -- that's what ended the Depression).

 
At 1/21/2009 10:36 AM, Blogger Caveat Bettor said...

But average federal compensation has gone from 50% of private sector levels to 200% in the last few decades, so things could be better than they are.

 
At 1/21/2009 10:37 AM, Blogger Milena said...

Government employees aren't the only way to measure the size and intrusion of government on our lives - that is obvious.

Taxation, expenditures and legislation can encroach on our lives without the addition of a single employee.

 
At 1/21/2009 12:36 PM, Blogger misterjosh said...

I find it interesting that the Government employment figures fell so dramatically during Carter and generally rose during the Bush I & II years. Tells me that the Republican party isn't so conservative after all. Not that that's a surprise.

I miss Ron Paul.

 
At 1/21/2009 12:44 PM, Anonymous LoneSnark said...

Government employees are unionized and therefore absent the bankruptcy of their employer, their wages will tend to rise over time relative to all wages.

As such, as with any employer faced with consistent wage growth, they will find ways to cut the number of employees by cutting quality in order to keep total wage payments under control.

This is also why quality has suffered dramatically at car makers manned by the UAW and public schools manned by the teachers union and at federal and state governments manned by unionized government workers.

 
At 1/21/2009 1:00 PM, Anonymous Anonymous said...

You have take out military "employees" for the chart to be meaningful.

 
At 1/21/2009 1:24 PM, Blogger John B. Chilton said...

Like Ken, I suspect that to be meaningful intertemporal comparisons you have to take into account the large increase in the use of contract workers by the federal government.

 
At 1/21/2009 2:26 PM, Anonymous Anonymous said...

"Yes, they do. Parenthetically, you talk about Clinton reducing military spending like it's a bad thing. "Our long nightmare of peace and prosperity is finally over," indeed."



Clinton presided over a period of "peace and prosperity"? Who knew?

Maybe you missed Somalia, Bosnia, Kosovo, Haiti, the attacks in Kenya and Nairobi, the first attack on the World Trade Center, the attack on the USS Cole, the bombing of Baghdad, Afghanistan and Sudan. Yes, in the face of a gathering storm, I think that crippling the US military is a "bad thing". It's particularly despicable when you attempt to lay the blame for military unpreparedness on the next CIC who must deal with the consequences of your incompetence.

Our "long nightmare" is just beginning as the socialist programs (ponzi schemes) established by the Democrats during the Great Depression and nurtured and enlarged by leftists like Johnson, Carter and Clinton start to bankrupt the country. Prosperity, indeed.

 
At 1/21/2009 4:17 PM, Blogger QT said...

Like a number of folks have noted, manufacturing jobs have been declining for decades due to increasing automation and a general shift towards a service based economy. Construction sector has been suffering for several years now.

Would be interested in seeing a chart that compared the growth in the public sector employment compared with total employment.

 
At 1/21/2009 4:19 PM, Blogger QT said...

Disregard prior comment. Looks like I did not read far enough.

 
At 1/21/2009 5:58 PM, Anonymous t jefferson said...

Government employes more people then Manufacturing. This Country needs to make stuff to stay viable. Shuffling papers and money around isn't going to cut it

 
At 1/21/2009 6:12 PM, Blogger David said...

What does the "manufacturing" line actually mean? Does it count everyone who works in a manufacturing enterprise, or only those who work in the manufacturing function? For example, is a turbine designer at GE Power counted, or only the guy who actually helps fabricate or assemble the product? There is a huge difference between these interpretatios.

As others have noted, there's also the question of whether the government number includes contractors. Sounds like it probably doesn't.

When people publish or post numbers, they should really make more of an effort to identify what these numbers really represent.

 
At 1/21/2009 8:14 PM, Blogger Craig said...

"Taxation, expenditures and legislation can encroach on our lives without the addition of a single employee."

So true, but, at this point, I'd settle for it.

 
At 1/21/2009 8:43 PM, Anonymous Ralph Short said...

So WCW, are you suggesting we have approximately 35mm to 40mm people in the armed services to end the recession? This would be approximately proportional to the no. of citizens under arms in WW2 and would have had to be a significant part of reducing unemployment.

Logically, then I guess you are recommending we start an even larger war to get this economy on the right track. Naturally, I am assuming you have also designated the particular countries that will benefit from the invasions.

 
At 1/21/2009 9:13 PM, Blogger Richard Rider, Chair, San Diego Tax Fighters said...

Ralph, WCW et al -- We don't need no new stinkin' wars to "stimulate" the economy a la WWII I have a FAR better plan.

Let's spend billions, nay, TRILLIONS to have gigantic holes dug in the ground, and then refill them. Think of the advantages over a war:

1. We don't have to kill millions of people on "their" side and ours.

2. We'd be destroying no property. Properly done, in a scant few years, these filled-in holes would be indistinguishable from the surrounding landscape.

3. Unlike WWII where the GI's got paid a pittance, our hole digging would be subject to the joys of the Davis Bacon Act, paying unskilled laborers $35 an hour in wages and benefits. Talk about stimulating!

Now, all you free market fanatics, what could POSSIBLY be wrong with this perfect solution to our economic doldrums?

And please, don't bring up Bastiat's broken window fallacy. I reject such logical refutations out of hand.

It's a no-brainer!

Literally.

 
At 1/21/2009 9:21 PM, Blogger Richard Rider, Chair, San Diego Tax Fighters said...

Two other advantages to my hole digging stimulating solution:

1. Unlike all the other stimulating spending suggested, these projects are extremely green, using almost no petroleum and wasting few resources -- because we should use only shovels in the effort to get maximum labor employment.

2. After the projects were completed, there'd be zero operating and maintenance costs.


Please send my Nobel Prize in Economics (kept the plaque -- just the check will suffice) to my San Diego address.

 
At 1/22/2009 6:23 AM, Blogger Plamen said...

To Richard Rider:

You, Sir, have successfully avoided the traps of automation and mechanization, but unwittingly fallen into the trap of tool usage: "because we should use only shovels in the effort to get maximum labor employment". If you use no shovels, the employment attained would be much higher. I'll take that Nobel Prize, and thank you in my acceptance speech [giggity-giggity)

 
At 1/22/2009 10:08 AM, Anonymous Anonymous said...

Dig all the holes you like, just don't use any "white males" to dig them. That's what Obama's economic advisor said in his congressional testimony. Pathetic.

Video:

http://www.youtube.com/watch?v=opxuUj6vFa4&eurl=http://hotair.com/archives/2009/01/22/video-no-stimulus-money-for-white-males/&feature=player_embedded

 
At 1/22/2009 3:51 PM, Blogger 1 said...


Atlas Shrugged: From Fiction to Fact in 52 Years



Whose Money Is It, Anyway? by John Lott jr.

 
At 1/25/2009 11:35 AM, Blogger Richard Rider, Chair, San Diego Tax Fighters said...

An update:

That fun stuff I wrote about digging and filling holes metastasized into a newspaper column which is running in a couple places.


I thought I'd post it here for you to share with everyone you know, or will ever meet:

Save the Economy – Dig and Refill Holes

By Richard Rider, Chairman, San
Diego Tax Fighters

Many folks look back fondly on FDR’s efforts to pull us out of the Great Depression. Killjoys point out that FDR’s deeply flawed policies didn’t work – we had the longest, most sustained depression since perhaps the Renaissance.
At least some solace is taken from the widespread assumption that WWII finally bailed us out.

Perhaps some see today’s overseas adventures as serving a similar purpose in this economic tailspin.
But we don't need no new stinkin' wars to "stimulate" the economy a la WWII. I have a FAR better plan.

To return to full employment and a prosperous nation, let's spend billions, nay, TRILLIONS to dig gigantic holes in the ground, and then simply refill them.

Offhand I can think of a dozen advantages of my plan vs. a WWII-type economic recovery strategy. Actually, my plan provides most of these advantages over all the other proposed stimulus and bailout packages as well. Consider:

1. We don't have to kill or maim throngs of people on "their" side – or ours.

2. We'd be destroying no property. Properly done, in a scant few years, these filled-in holes would be indistinguishable from the surrounding landscape.

3. In WWII the GI's got paid a pittance. But my federally funded hole digging would be subject to the generosity of the Davis-Bacon Act – paying unskilled laborers $35 an hour in wages and benefits. Talk about stimulating!

4. In contrast to all the other suggested Keynesian spending, these projects are extremely green, using almost no petroleum and wasting few resources – because we would use only shovels in an effort to employ a maximum number of workers.

5. Unlike most such public works efforts, the administrative overhead for my colossal projects would be minimal at most. For you see, nobody really cares when the work is completed, or even IF it is completed. Just give everyone a shovel, and outline the hole to be dug. Equal pay for all (though not perhaps for equal work). Indeed, the project could make work participation optional, except for the fact that the ornery voters and greedy taxpayers might feel that it’s somehow wrong to pay people for work not performed (go figure).

6. There would be no lawsuits for failed infrastructure. No concern over shoddy workmanship, or using defective components.

7. The usually inevitable public works cost overruns could be self-corrected by periodically adjusting how deep the hole(s) should be.

8. Since the holes would be dug far from busy roads, no one would be inconvenienced by the construction projects slowing traffic, or doubled speeding ticket fines.

9. We would need no eminent domain proceedings to steal other people’s property. We could simply rent cheap, useless vacant land for a couple years while each project rushed to completion, and then the owner could decide what if anything to do next with his property.

10. Politicians love to attend ground breaking ceremonies on public works projects. At the propitious moment, together they each dig a single petite spadeful of dirt – to great applause and frantic picture taking. They then turn the project over to the pros with their giant Caterpillar equipment. But with my project, our politicos could dig a second shovelful, and then a third. And no need to stop there. Indeed, I see this ongoing work as a new requirement for holding office. Think of it as the next aerobics fad. An ancillary benefit is that the more time politicians spend digging, the less time they’ll spend legislating – a huge cost savings for us all.

11. Unlike most government activities, these projects would not compete with or undercut the private sector. Indeed, I know of no company in America offering this unique service.

12. Perhaps most important, after the projects were completed, there'd be zero operating and maintenance costs.

I challenge all you free market fanatics: What could POSSIBLY be wrong with this perfect solution to our economic doldrums?

And please, don't bring up Frédéric Bastiat's broken window fallacy. http://en.wikipedia.org/wiki/Parable_of_the_broken_window
I reject such logic-based refutations out of hand.
Kindly send my Nobel Prize in Economics (kept the medal – just remitting the check will suffice) to my offshore account.

My proposal is a no-brainer!

Literally.

--30--

 

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