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Friday, July 6,2012

How Government Gridlock is Actively Hurting the Economy

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Most reporting on today’s employment report will lead with the fact that the economy added 80,000 jobs in June. But that number combines two distinct sectors of the economy—jobs added in the private sector and jobs lost in government. Employment growth in the private sector reflects how businesses feel about the economy. And while the rate of growth is moderate, it is steady and broad-based, with most industries adding jobs.

By contrast, the public sector continues to shed jobs. This is the direct result of deliberate policy decisions to get rid of teachers, firefighters, and police officers, and other valuable workers essential to our communities. Over the last year, governments have shed a total of 169,000. The previous year was even worse, as governments shed 626,000 workers. If we still had all of these jobs today our national unemployment rate would be between a half and a full point lower.


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