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Louis Jacobson
By Louis Jacobson July 11, 2011

Paul Krugman says government jobs have fallen by half million since January 2009

In the July 11, 2011, edition of the New York Times, Paul Krugman -- a Nobel Prize-winning economist and liberal columnist -- noted a statistic about recent trends in government employment.

He wrote, "Everybody knows that President (Barack) Obama tried to stimulate the economy with a huge increase in government spending, and that it didn’t work. But what everyone knows is wrong. Think about it: Where are the big public works projects? Where are the armies of government workers? There are actually half a million fewer government employees now than there were when Mr. Obama took office."

Has government employment really gone down in the past two and a half years? We looked in the databases for the Bureau of Labor Statistics, the federal government’s official tabulator of employment statistics.

We found that between January 2009 (when Obama took office) and June 2011 (the most recent month available), Krugman was right for overall government employment -- the combination of federal, state and local government workers. Overall government employment declined by 518,000 workers, or about 2.3 percent of the January 2009 level.

So his statistic is correct. But the closer you look at the data, the more varied the data becomes.

First, let’s look at federal government employment, which accounts for just 13 percent of all government employment. The number of federal workers has increased by 38,000 over the same period -- an increase of 1.4 percent.

And if you separate out the U.S. Postal Service, the growth was even bigger. Non-postal federal employment -- about 10 percent of all government employment -- increased over the same period by 139,000 workers, or 6.7 percent.

The decline in government employment clearly wasn’t driven by job losses at the federal level. It came from state and local government. So we’ll look at the trends for those categories here.

State employment accounts for 23 percent of the government workforce. State government payrolls declined by 113,000 over the same period, or 2.2 percent. Within this category, state education workers -- who account for a little under half of state workers -- actually rose slightly over the period. The hits were taken in the remainder of the state workforce -- a decline of 115,500, or 4.1 percent.

But the biggest declines in the government sector came in local government. Local government -- which accounts for 64 percent of all government employment -- fell by 443,000 workers, or 3 percent. That accounts for a huge portion of the half-million decrease in jobs that Krugman cited.

Education workers at the local level fared worse than those at the state level. Local education workers declined by 204,800, or 2.5 percent.

Non-education workers in local government fared even worse -- employment was down 238,400, or 3.7 percent.

The decline in government workers has certainly had an impact on the overall employment picture. Since the recession officially ended in June 2009, private payrolls have increased by more than 1 million workers, but government payrolls have declined by 493,000 -- cutting the number of jobs created almost in half.

So how does all this relate to Krugman’s comment? The fact that federal employment outside the Postal Service has risen by 6.7 percent in the past two and a half years is an important point to recognize for anyone studying employment trends. But Krugman was careful enough to avoid suggesting that federal employment declined by a half-million jobs. In fact, since a large chunk of the stimulus came in the form of aid to states -- specifically to help save jobs in education and other government sectors -- using total government employment figures as a yardstick seems reasonable to us. So we rate his statement True.

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Paul Krugman says government jobs have fallen by half million since January 2009

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