Let’s put President Obama’s notorious observation in some historical context. The table below shows the level of employment in the total economy, the private sector, and the government sector, all indexed to 2007 = 100. Between 2007 and 2010 private employment plunged 6.5% while government employment increased 1.2%. Private employment is starting to recover but is still 3.76% below the 2007 level while government employment is only 1.12% below 2007. These days the private sector is in permanent restructuring mode, but it takes a severe financial crisis to reduce government employment, which increased every year between 2000 and 2009. Since 1999, private employment has climbed just 2.2% while government employment soared 8.2%. While no one likes to see teachers and firemen laid off, local governments are now being pulled through a restructuring wringer that operates full-time in the private sector.
Source: Bureau of Labor Statistics
