The Jobs Number That Won't Surprise You: Public Sector Layoffs
There's already plenty of speculation about what Friday's jobs report is going to say, mostly because no one is quite sure what to expect: those with bullish expectations point to declining jobless claims and strong auto industry performance, while the pessimists are pointing to last week's disappointing manufacturing numbers as signs of a contraction.
But there's one labor market phenomenon that is almost certainly going to remain steady: declining public sector employment. As Paul Krugman points out this morning (and as we have been saying for months now), public sector layoffs are by far the most absurd aspect of the on-going unemployment crisis -- the government wants people to keep their jobs, and it has 100 percent control over the jobs of its own employees, and yet just last fall was laying off 1,000 public workers every single day.
Krugman points out that even Ronald Reagan didn't allow these massive declines in public sector employment to happen during his first term:
By this stage in the Reagan recovery, government employment had risen by 3.1 percent; this time around, it’s down by 2.7 percent [emphasis mine].
And as Krugman points out, the consequences have been significant:
We’re talking big numbers here. If government employment under Mr. Obama had grown at Reagan-era rates, 1.3 million more Americans would be working as schoolteachers, firefighters, police officers, etc., than are currently employed in such jobs [emphasis mine].
Demos reported nearly identical numbers in a report released last spring that highlighted the job-creating potential of a two-year public jobs program:
As you can see, investment in direct-hire public jobs yields massively preferential dividends compared to the tax cuts or transfer programs that have nevertheless managed to win more attention and support from policymakers. Moreover, a public jobs program could target those who need jobs the most, such as the long-term unemployed, who will face serious obstacles to securing employment even as the economy improves.
My fingers are crossed for good numbers this Friday, but we could set aside the guess work for good if we were willing to invest in a public jobs program whose expected pay-off we know quite well. That would alleviate a lot of uncertainty -- and not just for policy pundits, but for the millions of unemployed Americans looking for the end of the recession.