Friday, July 08, 2011

Why is reducing government jobs considered a free lunch?

Politicians love to brag about cutting government work forces.  This month, while the private sector added 57,000 jobs, government shed 39,000 jobs, for total job growth of 18,000, which is basically not different from zero statistically.

Cutting government jobs not only has consumption effects (people who don't get paychecks can't buy stuff), it also has productivity effects.  When the DMV is closed three days a month, people have to wait longer to get their drivers' licenses.  When there are fewer cops, crime increases.  When there are fewer high school teachers, the ability to offer AP courses drops, etc.

Is there waste in the public sector?  Sure.  But for those working in the private sector, particularly large institutions, ask yourself whether everyone you work with is productive.  I have no idea what the "correct" level of public sector employment is.  I also have no idea how much public sector employment crowds out the private sector, but if the crowding out effect is less than one (and with unemployment above nine percent, I am guessing the effect must be less than one), then reducing government employment reduces total employment.  But to think that cutting government employment is a magic pill for economic recovery makes no sense.

 

7 comments:

Alice Smith said...

Today government is changing their mind they are giving some part of work to private sector for effectiveness in working. As per my knowledge private sector has more educated human resource then government sector even private secor is paying more then goverment sector.


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eric said...

I love it that you think offering AP courses is a productivity enhancer. As a high school teacher, I have my doubts. Also, at my school AP courses have 25 students, while "Standard" level courses have only 18, so if you wanted to cut a course to save money, it would make more sense to cut the lower level course and keep the AP course...

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Roger said...

The Free Lunch really got me. Good lede! Also the fact that so many are buying the counter course, the hard numbers private/public should really churn some stomachs and hopefully wake up some who may count. And [eric] makes a point that may need some seasoning. i.e. some rethinking of the segregation/leveling of students [I could be not about either/or but a greater dynamics between private/public and standard/AP as well as a change in the private/public relationship to other training options.]

RAM said...

Good blog for Government jobs
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Harry Christen said...

I really like it that you think providing AP programs is a efficiency medicine. As an excellent trainer, I have my worries. Also, at my education AP programs have 25 learners, while "Standard" stage programs have only 18, so if you desired to cut a course to reduce costs, it would be preferable to cut the cheaper stage course and keep the AP course.

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veda kruti said...

Nice Blog regrading Government jobs This will help unemployed people lot.