Commentary

The Strongest Economy in a Generation — If You’re a Government Worker

By Stephen Moore and James Carter
November 25, 1996

When Bill Clinton declared that 10.7 million new jobs have been created during his presidency, what he didn’t say is that a bundle of those jobs were created with your tax dollars. It turns out that under Clintonomics, the third fastest area of employment (behind the service and construction sector) is government.

Nearly 800,000 new government jobs have been added since January, 1993. Take out the decline in Pentagon employment and there are now nearly 1 million more non-defense government jobs than there were when Bill Clinton took office. Clearly the government employee unions can answer with a resounding yes, when Bill Clinton asks are you better off today than four years ago?

Government employment has grown more than manufacturing, mining, finance, insurance, and real estate combined. To be fair to the Clinton administration, this is a trend that began under George Bush. In 1989, when Reagan left the White House, there were 1.9 million more Americans working in manufacturing —building things—than working for government. Today, there are more than 1.2 million workers in government than manufacturing. We now have less people making widgets than regulating and taxing them.

The government is one of the few sectors of the economy where the economy is producing good, high paying jobs. Unionized government employees, particularly at the state-local level, typically receive salaries and benefits that exceed comparably skilled private sector wrokers’ compensation by 30 percent or more. How can government be on a hiring binge when the Clinton administration claims that government employment is at its lowest level since the Kennedy administration? As usual, the White House is economizing with the truth. Today there are 415,000 more federal workers than there were when JFK was president.

It is true that federal employment has fallen during Clinton’s tenure. Bureau of Labor Statistics data show that the workforce has contracted by 5.6% since January 1993, a reduction of 160,000 jobs. In Washington, D.C.—where reductions in the rate of growth are considered cuts—any genuine cut (even just 5.6%) is a genuine achievement.

Where did the 160,000 workforce reduction come from? Where else? The military. Since Bill Clinton assumed office, Department of Defense (DoD) employment has fallen 152,500 or 17 percent. DoD employment has fallen from 32 percent of total federal employment in 1989 to 27% today. The cuts in defense employment have been so deep, in fact, that Postal Service employment now exceeds civilian DoD employment for the first time since before World War II. Of every 100 federal jobs eliminated over the past four years, 94 were military personnel.

This leaves a reduction of 1,200 decline in the bureaucracy for all other agencies. That’s a 0.6 percent cut. And virtually all of those reductions came in the legislative branch mostly under the 104th Congress. Legislative branch employment has fallen by an impressive 17 percent since 1993. Employment in the rest of the Executive Branch has fallen by 5,400 people.

The official government employment statistics actually understate the growth of federal civilian employment under Clinton. According to the Wall Street Journal, “federal personnel reductions aren’t as impressive as they first appear. Of the … civilians lopped from the federal payroll since January 1993, 17% were part-timers and 13% were temporary employees. At the Environmental Protection Agency, 89% of those let go were temps.”

The official employment statistics also ignore the rapid growth rate of contracted labor, which has become a kind of shadow government. As The New York Times pointed out last March, of those federal “jobs that have vanished on paper, many of the responsibilities are being fulfilled by outside contractors.” Today, more than 22 million people work for companies doing business with the federal government. Arkansas Sen. David Pryor, a Democrat and long-time associate of Bill Clinton, concedes: “The whole philosophy of beating our chest and saying how many fewer employees we have but never in the same breath saying, ‘Look at how much larger we are getting in the use of private contractors,’ is not an honest portrayal of what’s going on with tax dollars.”

Despite the congratulatory talk in Washington of lean budgets and tight-fisted politicians, government in the 1990s continues to be one of America’s most rapid growth industries. The $2.6 trillion of total government spending in America is now more than the combined earnings of the Fortune 500 companies. And the government has more workers than these firm’s combined payrolls. In fact, the federal government is the world’s largest — and most generous — employer.

So the president wasn’t lying when he maintained that government employees are “the hardest working Americans” he knows. Having spent virtually his entire life as a government employee, they are about the only working Americans he knows.

Stephen Moore is director of fiscal policy at the Cato Institute. James Carter is an economic analyst in Northern Virginia.