Liberal Indifference to the Jobless in the Private Sector

Great post by Hans Bader of the Competitive Enterprise Institute Blog.

"Senate Majority Leader Harry Reid claims that joblessness is not a problem in the private sector, where huge numbers of people have lost their jobs, and that it’s the public sector — where unemployment is much lower — where it is a problem. This nonsense could only come from someone like Reid, who has been a government official for decades, and is supported by liberal government employee unions.

Reid claimed, “It’s very clear that private sector jobs have been doing just fine, it’s the public sector jobs where we’ve lost huge numbers, and that’s what this legislation is all about.” (“Reid Says Government Jobs Must Take Priority Over Private Sector Jobs,” The Hill, 10/19/11).

Reid was defending Obama’s costly American Jobs Act proposals, which would spend billions more on state government employees, who are already much better compensated than the average American worker, and who have generous pension benefits that have resulted in trillions in unfunded pension benefits at taxpayer expense.

Contrary to Reid’s claims, 1,503,000 jobs, almost all of them in the private sector, have been lost during the Obama Administration (see figures for February, 2009 – September, 2011 (U.S. Dept. Of Labor, “Employment, Hours, And Earnings,” Accessed 10/19/11)). The official unemployment rate is 9.1 percent, and some unofficial figures put it closer to 20 percent. (“The Unemployment Situation – September 2011,” Bureau Of Labor Statistics, 10/7/11). By contrast, the unemployment rate for government workers is a mere 4.7%. (See Table A-14).

(Fox News gives a slightly higher figure for lost private sector jobs, saying that “since the president’s January 2009 inauguration, total private sector employment has dropped by 1.6 million.” Government jobs have gone down from their peak in the Obama Administration primarily because the 2010 Census came to an end. The Census temporarily inflated the number of federal employees).

As the private sector and high-tech industries have suffered, the government has expanded. One result is that the top average income in the U.S. is now in the Washington, D.C. Area, not California’s Silicon Valley. “The U.S. capital has swapped top spots with Silicon Valley, according to recent Census Bureau figures, with the typical household in the Washington metro area earning $84,523 last year. The national median income for 2010 was $50,046. … . The unemployment rate in the Washington metro area in August was 6.1 percent, compared with 10 percent in San Jose, according to Labor Department figures.” (“Top Income In U.S. Is…Gasp!…Wash. D.C. Area,” Bloomberg, 10/19/11)"