The public-sector drag on the job market

THE PUBLIC-SECTOR DRAG ON THE JOB MARKET…. The New York Times‘ David Leonhardt noted today that there’s some “renewed hope” on the economy, but optimism that existed when 2010 got underway faded over the spring. Growth that appeared to be picking up fell victim to “a combination of the debt troubles in Europe, the fading of stimulus spending and the usual caution by businesses and consumers after a financial crisis.”

Of particular interest, though, was this chart, flagged by Ezra Klein, that accompanied the Leonhardt piece.

2010labormarket.png

You’ll notice that total job growth obviously hasn’t kept up with population growth, and given the hole we fell into in 2008, we’ll need to do far better than just that baseline anyway. Also notice, though, that private-sector employment has been the strongest part of the economy, whereas public-sector employment has been undermining the economy by shedding jobs.

As Ezra put it, “If the line for government jobs looked more like the line for private jobs, the labor market would be in much better shape right now.”

Quite right. But let’s also note that this picture is in keeping with the Republican economic model. Indeed, one of the great ironies of 2010 is that Democrats haven’t been able to pursue their economic agenda, despite congressional majorities, but they’ve been blamed for the slow and fragile recovery.

Put it this way: if the GOP had its way in 2010, what would the party’s preferred economic agenda look like? Republicans would want Bush-era tax rates, cuts to public-sector employment, no additional aid to states and municipalities, no additional stimulus, and relying on the private-sector exclusively to generate job opportunities.

If this sounds familiar, it’s because Republicans have largely gotten their way for much of 2010, blocking Democratic efforts to do more of what works. Consider how much worse the above chart would have looked, for example, had it not been for the Recovery Act.

I mention this because, to hear GOP officials tell it, the nation has endured a failed experiment in Keynesian economics. That’s silly — we’ve had some progressive policies at the federal level, which proved effective, but have been counteracted by conservative, Hoover-like policies at the state and local level. It’s quite a racket — Republicans could have allowed Democrats to save public-sector jobs and improve the economy, but refused, and then complained about the weak job numbers.

Adding insult to injury, we see hacks like Gov. Tim Pawlenty (R-Minn.) running around blatantly and shamelessly lying about all of this, arguing to voters that the private sector is losing jobs while public-sector jobs are “booming” — which is the exact opposite of reality.