Besides healthcare, the only sector of the economy to add jobs in July was the public one. No doubt, government continues to get bigger at all levels.
The knee-jerk reaction by many folks is that this kind of job growth is bad, that government workers don’t create value, and, if anything, are more of a parasite on the sectors of the economy that do create value.
Now, there’s no doubt that a lot of public sector employment is parasitical — take those “retired” education workers in Florida who collect huge taxpayer-guaranteed pensions, and then come back as consultants, earning just as much as they did before.
But this isn’t everyone in the public sector, and clearly the government can create wealth and jobs. Let’s take national defence, which is probably the least controversial thing the government does. If an alien species from outerspace started attacking America, and our Air Force shot the aliens out of the sky, they would, in a very real sense, be creating wealth for the country. They would be improving our standard of living.
If FEMA had done a better job responding to Hurricane Katrina, it, too, would be creating wealth.
The problem is that FEMA didn’t do a good job, and their bungling of it is characteristic of government efforts. With bureacracy comes lot of bungling, corruption and mismanagement. That’s the problem. The reason to fear growth in public sector employment, and to believe that it’s not a good long-term trend is because we have reason to believe that public entities do things poorly, and so more and more of our human resources will be tied up in institutions that aren’t all that effective at what they set out to do.
Now, some will say, yes, but don’t private sector institutions perform awfully and misuse resources? Of course, but they also go out of business and have layoffs and face competition. Public bureaus don’t, and don’t face pressure to get better.
But fundamentally, when you can point to a public-sector organisation that genuinely improves general standard of living or creates value, there’s no reason to discount it, just because it’s taxpayer funded.
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