The best U.S. job growth in three years. A worldwide manufacturing revival. Such are the early gifts of spring, following the crashing disappointment of the health-care mandates.
Unfortunately, the jobs growth is reassuring only in comparison with the ravages of so many previous months. A third of the new jobs are in government, which hardly needed the boost, while the private sector — which has hemorrhaged nearly 8 million workers since 2007 — added just 123,000 positions.
In fact, the contractions of the late, great recession have largely been confined to the private sector, despite copious news coverage of strained and shrinking government budgets. Many jurisdictions were of course forced to make cuts — as I write this on Friday, for example, thousands of state and Denver city workers are off on unpaid furloughs — but those actions paled in comparison to what businesses had to do.
“While private-sector employment fell sharply in the last two years,” the Manhattan Institute’s Josh Barro noted earlier this year, “the public-sector, civilian workforce continued growing until mid-2008. It has since remained essentially flat. As a result, while private-employment rolls are nearly 7 percent smaller than they were three years ago, public-employment rolls have grown by nearly 2 percent.”
In Colorado, according to Department of Labor and Employment data released last week, employment in only “two of Colorado’s 11 major industry sectors increased over the [previous 12 months]. Education and health services added 4,000 jobs and government 2,000.”
You could argue that the boost in public-sector employment helped cushion the shock of recession and was thus a good thing. Trouble is, as Barro also points out, average wages of public employees grew at a pace “well ahead of the private sector” — in part because of hikes established in union contracts — continuing a trend that existed even when the economy was stronger.
In terms of compensation, federal workers are rapidly pulling away from private employees. As USA Today’s Dennis Cauchon recently reported, “Federal workers earned an average salary of $67,691 in 2008 for occupations that exist both in government and the private sector, according to Bureau of Labor Statistics data. The average pay for the same mix of jobs in the private sector was $60,046 in 2008, the most recent data available.”
And that’s only wages. Federal health, pension and other benefits are worth four times what private workers on average enjoy, Cauchon added.
Even supposedly ill-paid state and local government workers “have higher total compensation than private workers [in comparable jobs] when the value of benefits is included.”
In Colorado, a private audit of the state’s salary system last year found “that in the aggregate, state salaries exceeded market salaries by more than 6 percent.” State officials retorted that their benefits are lower, but that certainly can’t be said of the extremely generous state pension.
Meanwhile, when Denver conducted a “Total Pay Study” last year, it purportedly found city compensation somewhat higher than the general market for those earning up to $80,000, but somewhat lower for those earning more. Conveniently, however, the study relied upon an absurdly skewed sample of employers that included just a few giant private firms and a number of other cities and counties, and then failed to include time off in calculating benefits as a percentage of payroll. In other words, total compensation for city workers, comparatively speaking, is clearly more generous than even that study suggested.
In hailing the latest jobs news, President Obama warned that “it will take time to achieve the strong and sustained growth that we need.” He’s surely right, although one reason we need such strong jobs growth is to support a public sector that is largely immune to recession and whose employees now earn more — and soon perhaps much more — than the rest of America.
E-mail Vincent Carroll at vcarroll@denverpost.com.
