Government jobs are jobs, too

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The New York Times weighed in Dec. 4 on an economic fact of life that I've been harping about for years now: Jobs in the public sector are ... jobs. In many cases, they're good jobs. And when conservatives and business leaders talk about reducing the size of government -- and then complain about the unemployment rate -- they're stuck in doublespeak.

I know the Times has a paywall now, so if you can't get in from that link I'll give you the main points of the editorial:

While the private sector has been adding jobs since the end of 2009, more than half a million government positions have been lost since the recession. ... The cutbacks hurt more than just services. As Timothy Williams of The Times reported last week, they hit black workers particularly hard. Millions of African-Americans — one in five who are employed — have entered the middle class through government employment, and they tend to make 25 percent more than other black workers. Now tens of thousands are leaving both their jobs and the middle class. Chicago, for example, is laying off 212 employees in the upcoming fiscal year, two-thirds of whom are black.

That’s one reason the black unemployment rate went up last month, to 15.5 percent from 15.1. The effect is severe, destabilizing black neighborhoods and making it harder for young people to replicate their parents’ climb up the economic ladder. ...

Many Republicans, however, don’t regard government jobs as actual jobs, and are eager to see them disappear. Republican governors around the Midwest have aggressively tried to break the power of public unions while slashing their work forces, and Congressional Republicans have proposed paying for a payroll tax cut by reducing federal employment rolls by 10 percent through attrition. That’s 200,000 jobs, many of which would be filled by blacks and Hispanics and others who tend to vote Democratic, and thus are considered politically superfluous.

But every layoff, whether public or private, is a life, and a livelihood, and a family. And too many of them are getting battered by the economic storm.

Something to think about as city officials try to eliminate the latest defict and negotiate new union contracts. Because Repbulicans aren't the only ones who don't regard government jobs as actual jobs; a lot of Democratic officials and business leaders in liberal San Francisco seem to feel the same way.J

 

Comments

I forget which thread it was on now, but she posted an article entitled "9 things the rich don't want you to know about taxes." In it, they compared the incomes and tax burdens of the US with Germany (a big place with 80 million people, not a small one). It emerges that while Americans certainly pay less taxes, the after tax wages are roughly the same when you account for things that the Germans get for their taxes. There is one difference however, and that is the risk of catastrophic failure in the US, a risk that the Germans are shielded from. Americans and Germans are about equally well off financially when that is accounted for. However, that security has a value in and of itself, I would argue. Peace of mind has a tremendous value, not just in mental health, but in physical health as well.

Posted by Greg on Dec. 11, 2011 @ 2:29 pm

services that those taxes provide, when making comparisons. But on the other hand, many of us would rather have the government do less for us, and have more free cash to buy that for ourselves.

I'd prefer not to pay for insurance against an event that I either don't worry or care about, or am willing to indemnify myself against privately.

So while an American bears a greater risk of being wiped out by a catastrophe, he/she also has a better chance of becoming very wealthy. It's the American way to be willing to accept that tradeoff.

So ultimately I think what's important is to have a choice. A place like Europe if you want the government to ensure that nobody does that badly. Or a place like America where "the winner takes all". Then it's simply a matter of being able to pick the place more suited to your beliefs and ambitions.

The fact that swarms of people from all over the planet want to come to America tells us that there are many folks who delight in the higher risk approach we have here. So let's be glad both options are on the table.

Posted by Guest on Dec. 11, 2011 @ 3:23 pm

In reality, it's not that easy to just pack up and move. If it were, I wouldn't be here.

And that tradeoff is not one that a lot of Americans want to make. The ones that do, really don't understand the odds of becoming that "winner" who takes all. I've seen surveys that ask people whether they think they'll ever become millionaires. Something like 40% say yes. How many people actually do become millionaires? About 2%. The sad fact is that there is far less opportunity for social mobility in America than people think, and I suspect that if Americans really knew what their odds were, they'd start to question this system a lot more. Of course there are some powerful forces invested in Americans continuing to believe the myth.

I wouldn't mind that kind of "choice" that you talk about, guest. With a couple of caveats, however. In order for it to work, people would need to be adequately informed, and like I said, there are some mighty powerful forces making sure that they're not. And we'd need to make mobility between nations much easier. Maybe if people had the same kind of ease of relocating as corporations do, you might have a point.

As it is, the European way works better for *at least* 90% of the population. I would argue it works better for about 99%, when you factor in the beneficial effects of peace of mind. In any case, the vast majority. So given that we don't have very much real freedom to just pack up and move on a dime, nor do we have a system that informs people very well about the real advantages and drawbacks, I think it's better to just go with the system that works best for the great majority of folks.

Posted by Greg on Dec. 11, 2011 @ 5:11 pm

people still perceive they're more likely to make it here than there. That's called taking a risk - something Europeans don't have to do because of welfare paid out of higher taxes.

America provides an alternative to that - a bigger chance of getting rich along with a bigger chance of being poor. That might not suit your style but plenty of us prefer our system because we dream big.

Posted by Guest on Dec. 12, 2011 @ 6:26 am

Most of that increase simply goes straight back into financial transactions, not the real economy.

And inequality is indeed a problem because greater disparity creates bottle necks in access to standard of living. Other countries in Europe which have far less wealth disparity have far greater standards of living than we do, especially among the lower classes. So your last claim is totally specious as well.

Posted by Eric Brooks on Dec. 06, 2011 @ 1:13 pm

Anyone who has recently gone to a grocery store or filled up a gas tank can see the impacts of the most recent Fed inflation strategies called QE I, QEII and now QE III to support the Euro.

Inflation hurts lower and middle income working people the most since their purchasing power never keeps up with the increases in price levels. Plus, it's the 1%ers who use debt the most to finance their asset purchases, so inflation keeps their asset values high while making the rest of us pay for it with higher food, gas and sundry consumer purchases, along with flat or declining wages compared to the inflation rate.

Rich people don't care if gas or food prices go up by 10% or 25%. These expenses are a very small part of their overall consumption, whereas theses expenses make up the bulk of purchases by the lowest and middle income households.

We need to increase aggregate demand by getting more income into the hands of lower and middle income households. On that there is agreement. But rather than using government funded make-work job programs that increase deficits and debts - which only help the 1%ers living off the government interest - shifting the tax burden from working people to the wealthy is a far, far better solution.

We can start by repealing all regressive sales and payroll taxes and replacing them dollar for dollar with high excise taxes on anyone making more than $100,000 in rent, interest, dividend and capital gain income. Within a month you'll see a rebounding, prosperous economy once again as people have more disposible income to spend in the Main Street economy. Yes, the very wealthy will see their average net worth decrease from $137 million to $123 million, but thousands of communities and millions of families across the country will be far better off with this simple change to the current tax structure.

Until the government starts taxing wealthy landlords, bondholders and stockholders at least on a level equal to the high taxes that face working people, I'd rather see the US economy continue to spiral downward so that people start to take notice that it's the government tax subsidies to the 1%ers that cause many of our most extreme economic problems.

Posted by Guest on Dec. 06, 2011 @ 1:03 pm

You don't understand either economcis nor how power is projected.

Posted by Guest on Dec. 06, 2011 @ 3:26 pm

are an expense, Tim, even for a private company that expects to reap the rewards of a new worker's productivity. Companies don't hire people willy-nilly solely because of an abundant cash position; that's a risible implication. And if the result of a stock buy-back is an increase in the share price for "employees and investors," then wouldn't that be a beneficial thing for those particular shareholders? It might even spark a bout of selling among these same shareholders, which would drive the stock price back down while increasing the liquidity of the sellers, who might then be motivated by choice rather than government fiat to inject that money back into the economy. I'm no fan of buy-backs, but they're neither the cause nor the result of the "productivity" you seek in this case. Rather, they seem merely a new target for your politics of envy.

Posted by Chromefields on Dec. 06, 2011 @ 12:49 pm

Wow! What great news! Our poor people are wealthier than the poor in other places! A lot of them have TVs! Maybe even cell phones! Damn, let's stop worrying about poverty and economic injustice.

You can't be serious. Anyone with any sense knows that the inequality in income is a major factor behind the current recession. IN the past 20 years, the size of the US economy doubled -- and almost all of that money went to the top one percent. The purchasing power of the middle class has declined. With less purchasing power, they aren't buying stuff, thus there's less demand, and fewer jobs. Don't take a PhD in economics to figure that out.

Posted by tim on Dec. 06, 2011 @ 1:16 pm

And just to get all of you even more riled up: The nonprofit sector also employs a lot of San Franciscans. And the nonprofits are hurting, cutting back and laying off workers. That also hurts the economy.

If the billionaires were giving huge amounts of money to local nonprofits that hire a lot of people, that would be a productive use of some of their money. But by and large they aren't. Tech billionaires (except BIll Gates) are not known for their charitable giving.

That's why we should tax the hell out of these people and spend the money creating jobs.

Posted by tim on Dec. 06, 2011 @ 1:19 pm

They're getting shut down because we can't afford them any more.

Posted by Guest on Dec. 06, 2011 @ 1:45 pm

1) Nonprofits hire workers.

2) Workers spend their money in the real economy.

3) Workers' spending money in the real economy creates wealth.

Any questions?

Posted by Eric Brooks on Dec. 06, 2011 @ 2:16 pm

detracts from the productive part of the economy - the private sector.

It's a "nice to have" if you can afford it. We cannot.

Posted by Guest on Dec. 06, 2011 @ 3:01 pm

So all wealth comes from borrowing and taxes.

The difference with governments and other nonprofits is that they don't skim profit off of the top of that funding like private institutions do.

This means of course that nonprofit/government spending creates -more- general wealth in the real economy, especially for the middle and working classes; not less.

Posted by Eric Brooks on Dec. 06, 2011 @ 3:25 pm

the lower the wage of a person the higher the percentage of income they spend right away.

There is no added value of the labor of a non profit worker, they may take their check and turn around and spend it, but they are not adding anything with their labor.

There money may go directly into the economy, someone in the private sector who makes the same is adding value to their labors.

Posted by matlock on Dec. 06, 2011 @ 3:05 pm

Nations with much more equality still have recessions - just look at Europe.

Inequality affects who has the wealth but not the total amount of wealth. It's not indicative of anything except inequality. I have no view of it either way - that's class warfare plain and simple.

Posted by Guest on Dec. 06, 2011 @ 1:47 pm

When vast inequality occurs, -especially- through absurd levels of financial speculation, then the rich at the top of the system gain so much on-paper wealth that it is impossible to invest it all in the real economy. Consequently most of that excessive wealth is spent in global financial markets solely for the purpose of creating interest based financial bubbles which have no basis in the real economy and require the vast expansion of unmanageable credit to the public.

Eventually these financial bubbles become so inflated by unpayable debts and interest that they collapse, creating recessions and depressions; afterwhich the only way out of the crisis (for finance capital) is to create an even -larger- bubble which vampirizes even more interest on even larger debt; all thereby leading to yet another recession/depression.

This continuous, exponentially increasing crisis expansion, is the very nature of modern capitalism, and is literally destroying both the Earth and our civilization.

We have to stop.

We have to phase out capitalism before it destroys everything.

Posted by Eric Brooks on Dec. 06, 2011 @ 2:30 pm

it doesn't matter if it's equally owned or 90% owned by one person. The total wealth is the same either way.

The fact that you envy the rich doesn't make them bad or responsible for what you dont like. They're just smarter than you.

Posted by Guest on Dec. 06, 2011 @ 3:03 pm

negate the point made above about how recessions originate?

Posted by anonymous on Dec. 06, 2011 @ 3:29 pm

they have recessions everywhere, including places with much more equality than here, so clearly it's not a big cause.

Posted by Guest on Dec. 07, 2011 @ 9:56 am

I didn't argue that -all- recessions are caused by disparity.

However, it is clear that many of them are directly triggered by the crisis of surplus capital that I refer to, and a fundamental cause of out-of-control capital surplus is extreme wealth disparity.

This is as undeniable as the law of gravity. There is no logical way whatsoever for you to gainsay such a blatantly obvious truth.

Posted by Eric Brooks on Dec. 11, 2011 @ 7:31 pm

"This is as undeniable as the law of gravity. There is no logical way whatsoever for you to gainsay such a blatantly obvious truth" is meaningless hyperbole. Either show your evidence or accept you're just speculating.

Recessions appear to happen regularly and consistently in nations regardless of their level of inequality. If you want to oppose inequality on the grounds that you personally think it's "unfair", then fine. But blaming it for all the world's evils isn't helpful or credible.

Posted by Guest on Dec. 12, 2011 @ 5:59 am

I have shown proof.

I did not claim that all recessions were caused by inequality.

And I of course never said anything about disparity being responsible "for all the world's evils".

So. Just -who- is it that is engaged in hyperbole here...?

Posted by Eric Brooks on Dec. 14, 2011 @ 1:06 am

causes that may have nothing to do with inequality?

Excellent.

Posted by Guest on Dec. 14, 2011 @ 7:03 am

to your politics of envy, Tim ("tax the hell out of these people"), but as the commenter above said, government, which levies the taxes, is an incompetent minder of money. We've lost hundreds of thousands of government workers at all levels over the past few years, and yet the machine keeps humming right along, which tells me we probably have a few hundred thousand more to go. And non-profits? Come on. Just another borough of your unproductive Neverland paid for by "these people."

Posted by Chromefields on Dec. 06, 2011 @ 1:33 pm

The Chron today, concerning the city's "budget hole":

City workers: 26,000
City budget: $6.8 billion
Amount paid to city workers: $3.4 billion

So, $137,000 per employee!!

City workers got it good!

Posted by Guest on Dec. 07, 2011 @ 10:25 am

If the employees won't agree to pay and benefit cuts, there will quite simply have to be far less of them.

Their choice.

Posted by Guest on Dec. 07, 2011 @ 11:39 am

True that.

And judging from their resistance to reform, their numbers will have to be culled.

Posted by Guest on Dec. 07, 2011 @ 8:20 pm

Your editorial about government jobs this week should be on the evening news, over and over, until it sinks in. Not enough people read the NY Times and the Guardian to get the message out. I’ve been arguing for years that government is primarily in the jobs business: it hires people, creating jobs directly; and it buys goods and services from businesses which hire people, indirectly creating more jobs; and it gives money to entities which hire people, indirectly creating still more jobs; and it gives money to individuals who spend it at businesses which hire people, indirectly creating even more jobs. The ripple effect just keeps going and going.

So when Republicans propose “creating jobs” by laying off a quarter-million Federal employees to pay for maintaining the payroll tax cut for middle-class working people instead of increasing taxes on the wealthy (who’ve gotten extraordinarily wealthier over the last ten years, according to endless studies), ordinary working people stand up and cheer. Why? Are they brain-dead or rotten to the core? Neither, they’re probably just misinformed or brainwashed by the Right.

Or when Republicans hold unemployment compensation for the New Poor hostage for a reduction in taxes for the wealthy and a reduction in estate taxes for the very-wealthy, is it any mystery who’s interests they’re looking out for?

Republicans insist that letting the wealthy keep as much of their wealth as possible creates jobs because they use the money to start businesses. That might have been true a hundred years ago, but in 2011, they don’t start businesses in Peoria anymore, they start them in Beijing.

Some years ago, I read that Banana Republics all have two common provisions in their constitutions: the president is president for life and rich people aren’t taxed. The justification: they use their money to start businesses and create jobs, improving life for all. Sound familiar? Are Republicans trying to turn the United States into a Banana Republic?

Finally, a related issue: increasing the cost of higher education so it’s out of reach for all but the wealthy is like eating our seed grain. We’ll all live to regret it someday when we starve to death intellectually, technologically and, ultimately, economically.

Thanks for the editorial. Much appreciated.

Posted by Guest on Dec. 10, 2011 @ 11:26 pm

Here's a decent overview - from a Murdoch publication no less - of a few of the staggering economic problems facing the US economy, without resorting to the usual drivel about how the US needs "lower taxes" or more incentives for the "job creators."

American Privilege Rots an Empire From Within
Well-paid professionals are contributing to U.S. economy’s demise

A few quotes:

"Today, America rewards the wrong people and spends disproportionately on projects of the past. Symptoms of the flawed incentive system in the U.S. economy include a massive fiscal budget deficit, high unemployment rate, crumbling infrastructure and a failing basic education system.

International competition isn’t threatening the United States, but internal problems are. And unless the United States tackles its wrong-way incentive system and spending spree soon, its gradual decline will continue until it eventually joins the likes of Latin America."
...

"Against this backdrop, the United States is experiencing a full-blown economic crisis. The nation’s real unemployment rate, which includes idled workers who’ve given up looking for jobs, is 18%. One-tenth of the nation’s properties have been foreclosed since 2007, and another tenth have negative equity.

The poverty rate is more than 15%, and another 20% of the population is struggling on incomes near the poverty line. Looming over these grim statistics is the federal government’s budget deficit, which is equal to about 10% of the nation’s GDP.

The breakdown began with the 2008 global financial crisis, which was like a dam break. Problems had been accumulating for years, and a debt bubble had merely temporarily covered up problems. Now, the U.S. government borrows roughly 40 cents for each dollar spent. " (Note: read the last sentence two more times.)
...

"The top 1% control about one-fifth of the nation’s income and two-fifths of the wealth. The top 10% take in about half of all income and have accumulated 80% of the wealth. Meanwhile, about 80% of Americans merely get by and have very little wealth available as a cushion for when personal finances turn down.

The gap between the rich and the rest, which has roughly doubled over the past two decades in the United States, is an inevitable result of competition. Of course, competition motivates people, and inequality is often a price worth paying if it motivates people to make the pie bigger. All could be better off with a bigger pie, even if inequality worsened. Limiting competition improves equality but decreases incentives for people to work. A society needs to make a trade-off between the two.

Inequality worsens in an environment of limited competition, as inefficiency and social friction rise. Examples of this phenomenon include the Philippines, where few families rule through monopolistic practices. The country has become poorer relative to others over the past two decades, while inefficiencies are supported by Filipinos who work abroad and send money home."

http://www.marketwatch.com/story/american-privilege-rots-an-empire-from-...

The common demoninator referenced in the article of The Philipines and Latin America isn't a lack of "competition" as much as both places are highly feudalistic, with a small percent of the population receiving most of the economic land rent in the country, as well as most of the country's dividends, interest and capital gain income.

The other issue not addressed in the article is that technology has dramaticlly reduced the need for labor. Production is not the problem in the US or world economy; as always, it's about the fair distribution of the nations's/world's wealth and economic output.

Posted by Guest on Dec. 11, 2011 @ 9:20 pm

In one of the many newpapers I have read, public sector workerforce has grown.
Simple truth the public worker are paid by the taxpayers, the more taxpayers the more money we have. The problem is the tax system is broke which seemed to have caused. Prviate sector workers have seen their pay cut, hours cut, jobs cut and benefits cut. Money is lost, workers are lost, the whole system is going down.
We need more growth in the private sector, do you understan., Growth

Posted by garrett on Dec. 13, 2011 @ 7:34 pm