Menzie Chinn, co-blogger at Econbrowser, has some charts and graphs by which he presumably intends to debunk the notion that the federal government is expanding. They illustrate nicely that the number of federal employees as a percentage of population, although it’s grown over the last ten years, has been pretty constant for the last 50 years.
Rather than argue the case one way or the other I would ask what the operative definition of the federal government expanding is? We have fewer men and women in uniform than we did at the height of World War II. Does that mean that the military has contracted since then?
That total federal spending has grown in absolute terms and as a percentage of GDP over the last fifty or so years can hardly be denied. I’m not sure that’s the way to define the federal government expansion, either.
However, on a related note there’s a question I’d like to ask. It’s pretty clear that median compensation for federal employees is higher for the country, generally. The usual retort to that is that the difference can be attributed to the people with college and post-graduate degrees who work for the federal government. Here’s my question: is that true?
One way to get at the answer would be to look at the pay levels of federal government employees without post-graduate degrees. Is their total compensation higher or lower than the pay levels of people who don’t work for the government (at whatever level) and don’t have post-graduate degrees.
I honestly don’t know the answer to the question and I don’t even have a good idea of how to ferret out the answer. I can say with pretty fair confidence that the explanation (i.e. educational attainment) doesn’t hold water for local governments. Most local government employees are police officers, firefighters, and teachers. At least here in Chicago most police officers and firefighters don’t have post-graduate degrees. Indeed, a majority don’t have college degrees. Most are high school grads who’ve served in the military. Their pay is pretty darned good for high school only.
Most public school teachers have education degrees and are nine or ten month employees. And education degrees are notoriously lightweight. The pay in Chicago for a starting teacher with bachelors only for a nine month position is pretty darned good for such low requirements. Better than college-only non-civil servants.
What’s the situation for federal employees?
I find the linked analysis a bit simplistic. A few considerations:
1. Since the advent of New Federalism (Nixon era), new federal initiatives tend to be based upon federal money for states to run the program. So what one means by federal versus state employee depends upon the context of the query.
2. Similarly, my impression is that government employs more independent contractors for support jobs. Is that public or private sector?
3. Also, I would think our expectations should be that computers should be reducing overall employment in document-intensive fields like government. I would love to go back to the insurance company I worked at during high school and see what some of the underwriting areas looked like. Back in the early 80s, there were huge pools of secretaries, armed with electric typewriters (and wastepaper baskets), ringed by a few underwriters with primitve computers. I wouldn’t be surprised if employment in that area is 50% of what it was. Shouldn’t the same be true of government?
Well, it is Menzie Chin….
For example, Chin thinks it is fear of just the federal government that is the leviathan, when I don’t recall those for example, Robert Higgs making that distinction. What is it called when in writing an blog post one distorts another persons position?
Also, it looks at just one measure. For example, one of Higgs’ claims is that the crisis need not be real, but perceived and that the result is not just that it expands the size of government in terms of budgets, but also its powers. Case in point: the war on drugs. We are slowly but surely moving towards the idea that marijuana is nothing to get one’s panties in a knot about, but it sure has lead to a massive extension of state power to the point where busting down a person’s door with little to know evidence is not unheard of.
To quote Higgs,
It isn’t merely fiscal, this notion of leviathan.
I think that Chinn made a good point. Most of government growth, in terms of employees, has come at the local level. Our politics generally focuses on the “bloated” federal government. Wrong focus.
Steve V is on the right track. Government spending is growing too fast, but it need not come from hiring new workers. It lies mostly in entitlements and that mostly in Meidcare/Medicaid. Other areas like security, as he points out have increased not needed govt interference. I think this also shows up economically eventually.
Here is a decent Heritage report on Federal govt. pay mismatching. They estimate the difference costs us $47 billion. I think it has a few problems, but it is pretty good.
Steve
Oops.
http://www.heritage.org/Research/Reports/2010/07/Inflated-Federal-Pay-How-Americans-Are-Overtaxed-to-Overpay-the-Civil-Service
Dave,
Here’s a recent GAO report comparing military and civilian pay & compensation. It has links to several studies by others on that topic.
That’s pretty horrifying, Andy. With one exception the military job pays substantially more than its civilian equivalent (unless the civilian equivalent is a job with local government, in which case that pays even more).
Yes,
The military has been receiving pay and benefit increases above inflation for over 15 years. Originally, this was driven by recruiting and retention problems during the boom years of the 1990’s and military pay and benefits were deemed lower than civilian counterparts beginning in the early 1990’s (there were some studies done on this at the time, but I don’t have any links to those).
Fast forward, after a decade of stagnating wages in the private sector, the military continued to receive annual increases. Military pay has more than caught up, but military pay increases are now, IMO, entrenched in the system. This year, for example, there was a 3.4% increase. Why? There’s no legitimate need for it.
As I think you know, my wife is an active-duty military officer and I’m a part-timer in the National Guard (“part time” being only a couple of days every month). It’s frankly been disconcerting to me how little this recession is affecting us. Unless she commits a serious crime, my wife’s job is almost guaranteed for the next several years because she’s obligated for that time. The income I make just goes to savings at this point so disruption to my employment is not a huge concern.
My wife is an engineer and the military is still a place where science and engineering degrees are appreciated. So much so that they gave my wife a full-ride scholarship for her BS and then gave her full pay and benefits to earn a master’s and PhD (which she is currently working on). There isn’t much opportunity for her in the civilian world since she’s a nuclear engineer and almost all of those are employed in some fashion by the government.
And really, I think we’ve seen the writing on the wall. She will retire from the military in about five or six years, but as it stands I don’t think what is promised can be delivered. We fully expect retirement benefits to be cut in the future – in fact we don’t see how they couldn’t be cut given the financial trajectory this country is on. IMO that’s all for the best as there should be a limit to the burden those in government service should place on the backs of society.