Working for the man

Percentage of US workforce employed by the goverment, annual, % as well as absolute

Yesterday’s ADP jobs report confirms the views of many (myself included) that the United States is drifting back into recession. But I had a few questions so while waiting for Friday’s report on the state of US job growth in June I got curious about the composition of the US Labour force. I took the number of all government workers (USGOVT), and divided it by Total NonFarm payroll (PAYEMS) to arrive at the percentage of the workforce that is employed by the government. Presented by the black line in the chart above, its pretty interesting overall. Federal employment as a percentage of the total workforce peaked on July 1st, 1975 when 19.35% of all those employed worked for the US Government, and the lowest observation was 12.52% on September 1st, 1947. We always see an increase in this percentage during a recession, but I suspected this could be explained away by the fact that government employment stays relatively constant while private sector falls. So I added the total number of all government workers (USGOVT), presented in the blue line above. Over the decades we see a slow & steady increase in the aggregate number of those employed by the government, as well as an overall increase in percentage terms. The percentage has undoubtedly been falling since 1974, but still overall is disturbing. Also note that I haven’t included state and local government employment – that data is difficult to find, but its possible to source as a percentage of GDP [ .pdf ].

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