Public Servants Have Far Fewer Opportunities For Advancement in States With Pervasive Government Unionism

Most Americans today believe, with ample justification, that government is too big and tries to do too much, and therefore it may seem surprising at first that, according to new and revised data from the U.S. Commerce Department’s Bureau of Economic Analysis (BEA) published at the end of September, total state and local public employment across the nation grew by just  2.6% from 2002 t0 2012, barely a quarter as much as the 10.2% increase for total nonfarm private-sector employment over the same period.

Pundits who represent the small minority of Americans who believe government is too small, like Princeton University economist and New York Times columnist Paul Krugman, might be inclined to seize upon these data as evidence that, contrary to the common view that government spending has skyrocketed in recent years, government agencies are actually being starved by mean-spirited “austerians.”

Of course, the public spending binge is no mirage, so what’s really going on?  The truth is that there several good reasons why state and local public employment should have grown more slowly than private-sector employment since 2002 that have nothing to do with government “austerity.”  The most important one is demographic.  K-12 education represents half of all state and local employment, and five to 17 year-olds, the overwhelming majority of children in the K-12 system, are a rapidly declining share of the U.S. population.  Nationwide, the total number of Americans aged 5-17 grew by only about 1% from 2002 to 2012, compared to growth of just over 9% for the total U.S population.  Growth in K-12 employment far below overall employment growth is simply a logical consequence of this trend.

Not all the sluggishness in state and local government job growth is benign.  Part of the problem is that, on average, state and local public servants are significantly more expensive to employ than private-sector workers with comparable experience and skills.  Health care and retirement benefits in the public sector are especially costly by comparison with the private sector.  Government executives who are accountable to taxpayers thus have a strong incentive to avoid hiring new employees when times are tight.  They know that, due to rapidly rising noncash compensation costs, the public workforce is likely to get substantially more expensive each year even if they don’t hire anyone.

Of course, a key reason why government health and retirement benefits are so expensive, and so difficult to rein in, is that public employees are more than five times as likely to be unionized as private-sector employees.  Government union officials armed with monopoly-bargaining privileges typically fight to the hilt efforts to reform such benefits, even if the unpleasant alternatives to reform are hiring freezes and layoffs.

The fact that monopolistic government unionism is a major part of the reason why state and local job growth has been only about a quarter as great as private-sector job growth over the past decade is evident from the state-by-state data.

As of 2002, Big Labor wielded monopoly-bargaining control over a majority of public employees in 16 states.  That same year, fewer than 25% of public employees were unionized in 14 states.

Over the following 10 years, state and local employment in the 16 states with the highest government union density fell by 2.6%, even as it rose by 2.6% nationwide.  Meanwhile, in the 14 states with the lowest government union density, state and local public employment rose by 8.3%

Of course, when the sector he or she is employed in is growing, a worker has far more opportunities for advancement than when it’s shrinking.  Therefore, it is fair to say that public servants have far fewer opportunities for advancement in states with pervasive government unionism.

It’s worth pointing out that, although Big Labor continues to wield a great deal of clout in government workplaces, the share of public payrolls under its control has actually been slowly shrinking since it peaked at around 45% in 1983.  It seems government employees are gradually catching on the fact that unionism is not necessarily in their best interest.

U.S. Commerce Department data show that, over the past decade, state and local government employment grew only about a quarter as much as private-sector employment. Economic apologists for forced unionism like Princeton’s Paul Krugman would likely blame so-called “austerity” for the trend. But monopolistic government unionism is more likely responsible for it, to the extent it really is problematic. Image: Reuters/Tim Shaffer

 Total full-time and part-time employment by industry (SA25, SA25N)