Something has been bothering me since the most recent Bureau of Labor Statistics employment report came out last Friday. The report's headline pointed to a monthly increase of 227,000 in nonfarm payrolls, with enough workers rejoining the workforce to keep the civilian unemployment rate unchanged at 8.3%.
The reaction was predictable enough. Labor Secretary Hilda Solis hailed the improving economy; stock touts from Jim Cramer on up cited the report as evidence that things are looking up; actual people pointed out that an awful lot of people are still out of work and wages are still low; and Republicans complained that it was actually a poor showing, because if the "job-creators" would only stop having to pay taxes and obey the law, and government would stop spending so much, the numbers would be better -- and just in case, they decided that they still have doubts about that birth certificate.
A look inside the numbers reveals something else. It turns out that the job creators are doing just fine. In fact, the private sector accounts for more than the entire gain in employment in the last two years. The biggest drag on employment? The public sector, especially state and local governments, and the postal service.
Our esteemed opponents -- oh, wait, they forfeited any claim to that description a while ago -- our opponents, of course, want to turn any economic data release into evidence of an Administration policy failure. If that doesn't work, they try to make the data release out to be a fraud. And if that fails, there are always other distractions. Anyway, there's plenty of room for improvement in the recent data. BLS puts total nonfarm payrolls for February at 131.164 million. That's steady improvement over other, recent figures, and about 3.4 million better than two years earlier, just after the post-crisis bottom in January 2010. An increase of 2.7% in two years isn't great, but it's promising.
But here's the rub. Private employment over the same period has increased by 3.9 million, to 108.854 million. That's an increase of 3.7%. Not too shabby. The problem in employment isn't in the private sector. Those job creators haven't really been holding back; they've been moving ahead, though slowly. What's really keeping unemployment elevated is the public sector, especially at the state and local level. Here's what the numbers say for employment changes from February 2010 to February 2012:
US Postal Service: 661.2 thousand 2/2010 to 614.9 2/2012 -- loss of 46,000 jobs
State governments: 5.261 million 2/2010 to 5.180 2/2012 -- loss of 81,000 jobs
Local governments: 14.656 million 2/2010 to 14.330 2/2012 -- loss of 326,000 jobs
An awful lot of those local government jobs lost were teachers:
Local gov't (education): 8.370 million 2/2010 to 8.197 2/2012 -- loss of 173,000 jobs
All in all, government at all levels lost nearly a half million jobs in the past two years:
Total government: 22.765 million 2/2010 to 22.310 2/2012 -- loss of 455,000 jobs.
That's a loss of a little more than 2%, at the same time the private sector was adding 3.7%. So imagine. if public employment had remained steady, the unemployment rate might be 8.0%, rather than 8.3%. And if the public sector had added 3.7%, the unemployment rate might be 7.4%.
Overall, the private sector actually seems to be starting to turn the corner. It really isn't the so-called job creators that need help (but we knew that). The real drag on employment is at the state and local government level. And it isn't just a drag today. Those 173,000 lost jobs in local education aren't just jobs lost to today's economy. They represent that much degradation in the ability of the next generation of our citizens to continue to build the Republic we all love.