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  1. #1
    Nobody expects the Senior Member Lemur's Avatar
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    Arrow The Private-Sector Recovery

    A couple of recent articles jumped out at me, made me curious to hear the Org's take.

    First there's this one, about how weird the recent recovery has been in relation to other post-recession bounce-backs. Essentially, every other time in recent U.S. history, public sector has led the way with job creation. This time? Public sector job cuts are slowing us down. A bit of detail:

    Public sector employment has fallen sharply in the wake of The Great Recession, which is markedly different from every other recession of the past 35 years, according to a new analysis from the Economic Policy Institute.

    Government jobs held steady between December 2007, when the downturn began, and September 2009, when it officially ended. That was largely due to beefed up aid to state and local governments contained in the Obama administration’s $787 billion stimulus package. When that disappeared, so did more than 600,000 state and local teacher, police, firefighter and other public sector jobs, which added about a half percentage point to the overall unemployment rate.

    Which president’s economic recovery benefited most from an increasing number of government jobs? Oddly enough, it was President Ronald Reagan, who successfully ran for re-election in 1984 by proclaiming it was “morning in America.” Reagan, running in a year when unemployment fell over a percentage point to 7.5 percent, is generally (and incorrectly) remembered as the first conservative president to dramatically shrink the size and role of government.



    Interestingly, only 13% of those public job losses were on the Federal level. And the majority of states didn't go on firing binges; if you run the numbers, twelve states were responsible for 70% of the total public sector job cuts. Detail:

    Of the eleven states in which Republicans came into power in 2010 – Alabama, Indiana, Maine, Michigan, Minnesota, Montana, New Hampshire, North Carolina, Ohio, Pennsylvania and Wisconsin – five were among the seven states that lost more than 2.5 percent of their workforce from December 2010 to December 2011. [...]

    Overall, these 1 states were responsible for 40 percent of the total state and local public sector job losses in 2011. Add to these Texas, which because of its large size is responsible for 31 percent of the total at the state and local level. Taken together, these 12 red states drove over 70 percent of the total losses. The rest of the states suffered much smaller losses or even slight gains.



    Thoughts?
    Last edited by Lemur; 04-06-2012 at 19:51.

  2. #2
    Enlightened Despot Member Vladimir's Avatar
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    Default Re: The Private-Sector Recovery

    Heavy thread for Friday afternoon. Did you see the study that found the dramatic rise in government employee salaries during the recession?


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  3. #3
    Part-Time Polemic Senior Member ICantSpellDawg's Avatar
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    Default Re: The Private-Sector Recovery

    The reason that we arn't seeing the spike in public sector employment shown in other recoveries is that the recovery has not begun. We are still in the doldrums and are just getting used to it at this point, making it feel like a recovery.
    Last edited by ICantSpellDawg; 04-06-2012 at 20:52.
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  4. #4
    Nobody expects the Senior Member Lemur's Avatar
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    Default Re: The Private-Sector Recovery

    Quote Originally Posted by ICantSpellDawg View Post
    The reason that we arn't seeing the spike in private sector employment
    You're misreading the numbers. Private sector employment has been up for seven quarters, I believe. Maybe more. I'd have to Google it, and I'm on deadline. The graphs I posted are of public-sector employment.

    By private-sector standards, we are well into recovery.

  5. #5

    Default Re: The Private-Sector Recovery

    I don't understand economics...what's the connection between public sector employment and exiting the recession? I mean, what's the theory other than that in the past public sector jobs have increased as we left a recession.

  6. #6
    Nobody expects the Senior Member Lemur's Avatar
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    Default Re: The Private-Sector Recovery

    Quote Originally Posted by Sasaki Kojiro View Post
    what's the connection between public sector employment and exiting the recession?
    Total employment and economic activity. So for example, a Marine in Camp Pendelton is considered employed. He buys things, he spends money, he generates economic activity. From the economy's perspective, he is adding to the bottom line, and it doesn't matter that his paycheck comes from your and my taxes. What's interesting about this recovery is that net public employment has been consistently down, so overall economic activity looks lower than it actually is. (Or you could say this is the true state, if you discount all public spending, which is tough to do.)

    In a not-uncommon case of cognitive dissonance, many of the politicians criticizing the recovery are the same people responsible for or advocating a shrinking of public sector employment. (At least as long as there's a Democrat at the top of the Executive branch. Once there's a Republican? Not so much.)

    So we've had something like two years of consistent growth fueled entirely by the private sector, hence the name of the thread. I find this interesting.
    Last edited by Lemur; 04-06-2012 at 21:32.

  7. #7
    Part-Time Polemic Senior Member ICantSpellDawg's Avatar
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    Default Re: The Private-Sector Recovery

    You're right, I meant public sector. I was talking about the first chart that you had posted. Maybe we are getting serious about shrinking the role of government.
    Last edited by ICantSpellDawg; 04-06-2012 at 20:55.
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    The very model of a modern Moderator Xiahou's Avatar
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    Default Re: The Private-Sector Recovery

    Quote Originally Posted by Lemur View Post
    You're misreading the numbers. Private sector employment has been up for seven quarters, I believe. Maybe more. I'd have to Google it, and I'm on deadline. The graphs I posted are of public-sector employment.
    Your chart looks a little 'weasely' to me.... Look at the source, "author's analysis".

    Setting that aside, it doesn't chart changes in private sector employment. I think that'd be useful when comparing the recessions. We're 5 years from the start of our current recession and our private sector job growth is still extremely anemic. The last numbers for March to April are only 119,000 private sector jobs. The figure for required job growth just to keep up with population is usually pegged at 150,000.

    Private sector job growth isn't even enough to keep up with population growth. The only reason the unemployment % crept down is because record numbers of workers are becoming discouraged and leaving the work force.
    Last edited by Xiahou; 05-10-2012 at 15:53.
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  9. #9
    Nobody expects the Senior Member Lemur's Avatar
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    Default Re: The Private-Sector Recovery

    Quote Originally Posted by Xiahou View Post
    Look at the source, "author's analysis".
    Yes, it's a Business Insider/Fiscal Times analysis (key bit you omitted) of "Bureau of Labor Statistics Current Employment Statistics public data series." Here's the gateway to the raw data. Cheers.

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