Big Government?

How often do you hear Republican talk about “Big Government?” Did you know that we have the fewest federal employees in 47 years? According to an article in the New York Times,

Bloated Government? Federal Employment at 47-Year Low
Economix
By FLOYD NORRIS
October 22, 2013

It was the summer of 1966. Lyndon Johnson was in the White House and the Great Society was roaring. In August, the federal government had 2,721,000 employees.

Now it is the fall of 2013. There are complaints from Washington about a bloated federal government. Another Democrat, Barack Obama, is president.

In September, before the government shutdown, the government had 2,723,000 employees, according to the latest job report, on a seasonally adjusted basis. That is the lowest figure since 1966. Until now, the lowest figure for the current century had been 2,724,000 federal employees in October 2004, when George W. Bush was seeking a second term in the White House.

Now, the federal government employs exactly 2 percent of the people with jobs in this country. In 1966, the figure was more than twice that, 4.3 percent.

When you listen to the Republicans you would think that the federal government was bursting at the seams with employees.

The other argument you hear from the Republicans is that federal employees are paid too much compared to the public sector, according to the Congressional Budget Office they are… on average 2% more.

Overall, the federal government paid 2 percent more in total wages than it would have if average wages had been comparable with those in the private sector, after accounting for certain observable characteristics of workers.

However, federal employees do excel in benefits.

On average for workers at all levels of education, the cost of hourly benefits was 48 percent higher for federal civilian employees than for private-sector employees with certain similar observable characteristics, CBO estimates.

I don’t consider that the federal employees have too many benefits but that the public sector doesn’t have enough. I believe that the fast food places and the big box stores drag down everyone benefits in the public sector and that pension have gone by the wayside to be replaced by more risky 401ks and IRAs.

State governments have grown or shrank depending upon the state. In the New York Times Business section they had an interesting article about state governments, they said,

States with a larger government presence — as measured by either employment or economic impact — tended to vote Republican in the 2012 election, while states with a smaller government presence tended to vote Democratic.

What! This can’t be true, the boasts about being for smaller government!

Government workers as a percentage of all employees, Aug. 2013	Change in number of government workers, Jan. 2009 to Aug. 2013	Government proportion of total state G.D.P., 2012	Change in government real G.D.P., 2010 to 2012
All States 16.o%	All States -3.3%	All States 12.3%	All States -1.3%
Rep. Voting* 17.3%	Rep. Voting -1.3%	Rep. Voting 12.9%	Rep. Voting -0.9%
Dem. Voting 15.5%	Dem. Voting -3.6%	Dem. Voting 11.9%	Dem. Voting -1.6%

*States that voted for Gov. Romney in the 2012 elections

That’s right, the Republican voting states have bigger government than Democratic voting states and what is interesting if you compare Wisconsin where they elected Scott Brown and neighboring Minnesota which has a Democratic governor ...

Government workers as a percentage of all employees, Aug. 2013	Change in number of government workers, Jan. 2009 to Aug. 2013	Government proportion of total state G.D.P., 2012	Change in government real G.D.P., 2010 to 2012
41* Wis. 14.6%	27 Wis -3.0%	41 Wis 10.4%	48 Wis -4.3%
36 Minn 36.0%	19 Minn -0.1%	45 Minn 9.7%	36 Minn -1.9%

*Ranked (the higher number, the better)

So Wisconsin deep cuts by Governor Brown did result in small government compared to Minnesota. The New York Times Sunday Opinion page had an interesting article "Right vs. Left in the Midwest" compared the two states…

A month after Mr. Walker’s inauguration in January 2011, he catapulted himself to the front ranks of national conservative leaders with attacks on the collective bargaining rights of Civil Service unions and sharp reductions in taxes and spending. Once Mr. Dayton teamed up with a Democratic Legislature in 2012, Minnesota adopted some of the most progressive policies in the country.

Minnesota raised taxes by $2.1 billion, the largest increase in recent state history. Democrats introduced the fourth highest income tax bracket in the country and targeted the top 1 percent of earners to pay 62 percent of the new taxes, according to the Department of Revenue.

So you can see they took the exact opposite tracks, the Republican governor cut government and went after the unions, while the Democratic governor went after the rich. How did it turn out after three years?

Three years into Mr. Walker’s term, Wisconsin lags behind Minnesota in job creation and economic growth. As a candidate, Mr. Walker promised to produce 250,000 private-sector jobs in his first term, but a year before the next election that number is less than 90,000. Wisconsin ranks 34th for job growth. Mr. Walker’s defenders blame the higher spending and taxes of his Democratic predecessor for these disappointments, but according to Forbes’s annual list of best states for business, Wisconsin continues to rank in the bottom half.

Along with California, Minnesota is the fifth fastest growing state economy, with private-sector job growth exceeding pre-recession levels. Forbes rates Minnesota as the eighth best state for business. Republicans deserve some of the credit, particularly for their commitment to education reform. They also argue that Minnesota’s new growth stems from the low taxes and reduced spending under Mr. Dayton’s Republican predecessor, Tim Pawlenty. But Minnesota’s job growth was subpar during Mr. Pawlenty’s eight-year tenure and recovered only under Mr. Dayton.

The article goes on to compare health insurance coverage, Gov. Scott refused the Affordable Care Act (Obamacare) while Gov. Dayton embraced the ACA and as a result,

Mr. Dayton is on course to improve Minnesota’s already low uninsured rate. He expanded Medicaid to cover an additional 35,000 people and accepted Washington’s offer to pick up the cost — as half the states, including a growing number with Republican governors, have. Mr. Dayton also created a state insurance exchange, which enrolled more than 90 percent of its first month’s target. Meanwhile, Minnesota’s tradition of innovative medical care and nonprofit insurers produced premiums in its insurance exchange that are, on average, the lowest in the country, well below premiums in Wisconsin.

The article says that it is still too early to draw and conclusions but the results so far are impressive. Minnesota did cut government but not as deeply as Wisconsin but Minnesota raised taxes to make improvement to the infrastructure and that according the editorial helped finance the state’s growth.