Jobs, Who Creates Them?
In GoLocalProv.com today, Dan McGowan tells of how Rhode Island has shed more government jobs, as a percentage, than any other state in the country since 2007. He uses some nice numbers and percentages to show the facts.
In total, Rhode Island lost about 4,400 government jobs over four years, ranking 33rd among states in jobs lost. The state now has about 59,900 government employees.
The 6.84 percent reduction over four years is the highest in the country
Ok, so there’s nothing wrong with using percentages and raw data like that. But let’s look at it another way. We have 59,900 people employed by the taxpayers. According to the 2009 census, RI had about 1.05M people living here. Doing a little math there shows that one in every 17.5 people living in the state is employed by the state or a municipality. That’s not one in every 17.5 working people, that’s one in every 17.5 people. That includes babies, students, retirees. If I knew how to figure out how many people are actually of working age, I’d better know just how many people working in the state, work on the taxpayer dime.
McGowan also goes on to very casually mention that states like New Hampshire and North Dakota actually gained government employees. Why is that not surprising when those states are actually growing their economy? North Dakota is experiencing a bit of a boom as currently the fastest growing state in the country. New Hampshire is a pro-business state. So to compare Rhode Island to those states would be comparing apples to dump trucks.
The article also gets opinions from Kate Brock, the executive director from Ocean State Action who says that cutting state employees is killing the economy. I don’t understand how costing the taxpayers less by not having to pay for bloated payroll will harm the economy. It means not as much money will need to come out of taxpayers’ pockets, so we will have more money to spend on the economy, to spend on businesses that are still trying to make it in Rhode Island. This is exactly how you grow an economy, not hurt it.
Carcieri was on the right path when he cut the government workforce. In my own random experience, he didn’t go far enough. We’ve all seen the reports of government employee waste, with examples like the guy literally sleeping on the job.
We do have many problems in this state, especially with regard to the government, but cutting too many government jobs definitely is not one of them.
According to the Bureau of Labor Statistics (www.bls.gov/eag/eag.ri.htm), Rhode Island’s Civilian Labor Force, which includes, I believe, everybody except military, agricultural, and federal employees, was 560,400, so state and local government workers represent 10.7%, or roughly one in ten.
However, the BLS then subtracts 58,800 unemployed people in the workforce, leaving 501,500 who are working. That means 11.9% of (non-military, non-farm, non-fed) working Rhode Islanders work for state or local government.
A couple of years ago I was curious about the percentage of government employees RI had, compared to other states. I no longer have the figures at hand, but I remember being surprised that RI’s figures were only a few percentage points above the national average. I believe I did a breakdown of state and federal employees, but my recollection is sufficient to give a result.
Available census data does breakdown the government workers per state.
Justin, the whole sleeping on the job thing needs to die, and die quickly. If you’ve never seen a private sector employee sleeping on the job, you’ve had your eyes closed. The only reason everyone gets upset when public sector employees do it is because it’s our tax dollars that pay for them to slack off. So actually, we are holding government employees to a HIGHER standard than the private sector, where I’ve certainly personally seen countless cases of people playing solitaire at their desks, Sudoku, Farmville… whatever. It’s a cheap shot to keep pulling out that story / video of the dude sleeping. It happens everywhere, not just government. Ms. Brock has an obvious labor agenda that everyone here is aware of… but you present just a different extreme to counter her extreme statement: “I don’t understand how costing the taxpayers less by not having to pay for bloated payroll will harm the economy. It means not as much money will need to come out of taxpayers’ pockets, so we will have more money to spend on the economy, to spend on businesses that are still trying to make it in Rhode Island.” “bloated payroll”? Now surely, RI being the state it is, there are people making more than they should be because their daddy or mommy got them a position their didn’t deserve. But Government employees on the whole make less per hour/week/year than their private sector peers, and this has been proven statistically time and time again. And again, just because a taxpayer has more tax money doesn’t mean they will spend it… especially in an economy with extremely unsure job security, and historically low consumer confidence levels. So yeah… not really buying your argument that cutting government jobs will help the economy any more than I… Read more »
Jparis,
Whom are you addressing?
Sorry Justin, I wrote your name (because you’re just that cool), without thinking — I was addressing Patrick who originally wrote the post.
No edit feature… guess I should preview more often 😉
“If you’ve never seen a private sector employee sleeping on the job, you’ve had your eyes closed.”
Two wrongs don’t make a right. If I supervise someone who sleeps on the job, I’d fire them whether it was a public or private entity.
“The only reason everyone gets upset when public sector employees do it is because it’s our tax dollars that pay for them to slack off.”
Precisely. Because we are the employer. I would assume that if you employed someone and they were sleeping while on the clock and that money was coming out of your pocket, you’d fire them too. No?
The “bloated payroll” is not necessarily the amount they’re paid, it’s “bloated” because there are still people on the payroll who should not be. There are way too many “Hey, who did you know to get this job? My uncle knew the hiring manager, that’s how I got here.” and others that just sort of walk the halls of the State House.
“And again, just because a taxpayer has more tax money doesn’t mean they will spend it… especially in an economy with extremely unsure job security, and historically low consumer confidence levels.”
They’re not necessarily independent occurrences. If people have more money to spend, then jobs may become more secure, or more jobs in the private sector might be created and then consumer confidence levels may increase.
Also, anyone who says there is a low consumer confidence level has never tried to drive down Rt 1 in Attleboro on a mid-Saturday afternoon. That road looks like Christmas year round on the weekends.
Jparis – Next time you’re in DC, stop by and I’ll introduce you to some HR people with bachelors from schools you’ve never heard of who earn $120,000/year plus full transit subsidy and can’t speak in full sentences or physically pronounce the word “ask.” They’re rude and useless and take 3-hour lunches everyday. We’ll see if you still think public employees are underpaid.
Dan,
Here is an observation that I, and others, have made about Washington. When you observe people on the street in the business districts of Boston, or New York, they are “going someplace”. When you observe people on the street in Washington, they are “strolling”.
It is also notable that many large, private, office buildings are essentially unoccupied in Washington. Many office suites are rented by out of town concerns to provide a “Washington Presence”. Staffing of these offices is minimal. However,demand is high, so rents are high.
I see from recent news reports that the “average” federal salary in D.C. is now 120K, unless I misunderstood the article. I supose it might have been “household income”. I was offered a job at State once, the salary didn’t seem that impressive then. Lots of people would “axe” about that.
The problem with the Federal Pay Scale is as follows:
Assuming you have any form of higher education, you automatically start out as a GS-7 or GS-9 earning a respectable 40-60k, plus several other benefits, like transit subsidy, student loan assistance, and bonuses, which most people don’t realize exist. Over the next 5-10 years, it is an unwritten rule that everybody gets promoted to GS-12 regardless of merit. Then, at the 15-20 year mark, they give you your ending GS-13 salary to keep you fat and happy and not filing grievances or discrimination suits. Once you have GS-13, the step increases quickly stack up automatically each year to send you soaring above $100k and beyond. This process has essentially nothing to do with merit, so everyone winds up there, even useless HR and Admin employees who have no work to do most days and treat everyone with contempt. The people who are any good at all are quickly promoted to GS-15 supervisors who can earn base salary of up to $155-200k.
My biggest problem, since I am one of the few people who actually works, has simply been locating people. Every time I go to somebody’s desk they are on their break and nobody knows where they are or when they’ll be back, on a 3-hour lunch, out sick, or most commonly teleworking. If you call an employee teleworking, you can expect to get no response, a response 3-4 hours later, or if they actually answer, an extremely hostile attitude like you are snooping on their private life. There is absolutely no recourse for any of the above, mostly because there is no incentive for any of the supervisors to care.
http://www.fedjobs.com/pay/pay.html
I had no idea that pretty much any federal employee working in a major city also gets a 20%+ ‘cost of living’ adjustment. Wow.
And most of the federal folks I know have a nice leased car with Govt. plates that they just drive home at the end of the day.
@Patrick: Understood on your definition of the bloated payroll issue, and lord knows I’ve directly seen that during my time in RI. As for the dude who was sleeping on the job, he would be canned in a heartbeat… everyone who’s worked for me knows that. I just don’t know if we aren’t using that piece of footage as a bit of a club we swing about every time we talk about government waste now. Can’t argue with you about Rt. 1 in Attleboro, or for that matter Rt. 2 in Warwick, where at least before I left the state, commerce was still chugging along. Still, overall spending continues to be down, and people on average are saving more of their money than they did before the recession — that’s all I was getting at. @Dan: Why is it that I have a natural distrust of HR people? Too many episodes of “The Office”? I don’t doubt that there’s some severe bloat at a number of agencies employing people at completely inappropriate pay scales… I mean $120,000/yr — isn’t that a GS-15? How can an HR person be a GS-15, when I know Economists at OMB with at least 6 years of education who are still GS-14’s. So if you’re saying that a top-to-bottom review of pay vs. skill/education is required, I say “sure”. That’s a small part of what I used to do at EOP — finding wasteful programs that were over-budget and cutting them. Just so that everyone remembers though, the average rent for a 1-bedroom apartment in DC-proper is at least twice the average rent for a 1-BR in Providence. So back when I was in DC, I was making a salary you might have balked at — but when you figure in the cost of living,… Read more »
“like the guy literally sleeping on the job.”
Hey! He was parked on the job! Quoting: “I’m parked on the job”.
See?!
“I mean $120,000/yr — isn’t that a GS-15? How can an HR person be a GS-15, when I know Economists at OMB with at least 6 years of education who are still GS-14’s.”
With automatic step increases, GS-13’s can make up to $116k in the current DC GS pay scale plus bonuses of a few thousand and all the other monetary benefits I mentioned. GS-14’s can make considerably more than that with step increases. GS-15’s are generally managerial positions – way too many of those also, although as a side note I don’t think the pay is inherently outrageous for a division director. Most managers supervise somewhere between 4-6 employees. It should be at least double or triple that, if not more.
If you’re just an average employee or even an extremely poor one, they keep you at GS-13 and that’s your “punishment.” It’s tough to be a malcontent raking in that kind of cash for no work, but plenty of the union employees still manage somehow and file their handful of grievances each year, usually over petty nonsense. Somebody will probably call me “elitist” for saying so, but my personal feeling is that nobody in HR should be making GS-14 and certainly nobody should be making GS-15. I’m sorry, but I’ve seen what they do, at least in the Federal agencies, and it is no exaggeration to say that the average high school student could do it with minimal training.
“It means not as much money will need to come out of taxpayers’ pockets, so we will have more money to spend on the economy, to spend on businesses that are still trying to make it in Rhode Island. This is exactly how you grow an economy, not hurt it.”
Would this statement not apply to the reason to end the tax cuts for only the wealthy and do what Obama famously suggested with his “spreading the wealth” comment. Also making money available to the working class so that it will find it’s way into the economy quickly is the logic behind the government providing a stimulus and one of the many reasons to raise the minimum wage.
“Would this statement not apply to the reason to end the tax cuts for only the wealthy”
I’m not opposed to that.
“Also making money available to the working class so that it will find it’s way into the economy quickly is the logic behind the government providing a stimulus”
Phil, I’m no economist but even I can see the huge difference between letting people keep what they earn vs. borrowing money and handing it to them, but making them pay it back later.
“and one of the many reasons to raise the minimum wage.”
I’m guessing there is no minimum wage that progressives would be happy with. No matter what it is, it’ll be too low. Or would you like to propose a number? Because whatever the minimum wage is, it just drives up all other wages all along the spectrum, so then it all becomes relative. If you raise the minimum wage to $10 an hour, that sounds pretty good, right? Except all the people who were making $8 an hour will now make $11, all the people who were making $9 will now make $12 and so on. This leads to inflation which then completely eats up that raise and just makes everything more expensive.
If the problem is that minimum wage isn’t high enough, why do so many jobs get outsourced to India and China? Is it because they do a much better job and their quality control is so much better than in the US? Or is it because they pay them less? So being forced to pay people more in the US will help jobs and help the economy how?
“there is no minimum wage that progressives would be happy with.”
OK, this is true.
“Whatever the minimum wage is, it just drives up all other wages all along the spectrum, so then it all becomes relative.”
It does drive prices up, but not in direct proportion to the amount you raise the wage. If the national minimum went from $10 to $11, inflation wouldn’t be 10%.
Ask any business owner what’s stopping him from hiring now, and ‘minimum wage’ isn’t really part of the equation. It’s ‘all the costs’ (payroll costs, overhead, insurance, potential unemployment costs, followed by ‘there’s not enough demand to justify it’, and ‘I’m worried about what the health care plan will cost, so I’m going to wait-and-see before I hire’.
If you want to put people to work, income tax cuts for the middle and upper classes aren’t going to help. Cutting business taxes might, if it’s done properly. I would go with a One-Two Punch of putting the burden for all the payroll taxes on the employee while simultaneously bumping-up the minimum wage to one that’s actually within the financial ‘habitable zone’.
There’s no excuse for the minimum wage being so low that a household with TWO full-time min-wage jobs can’t afford rent, food, and a cheap car at the same time; that’s where we are now.
So how’s this: Cut -business- taxes and help unburden them a bit from various statutory expenses by shifting the entire burden to the employees, then bump the minimum for employees a fair amount, and make up for lost revenue with either spending cuts or personal income tax hikes.