President Obama got himself in trouble last week when he attempted to make a valid point about public sector jobs. The gaffe, as all the right-wing talk show pundits and conservative op-ed columnists were quick to call it, was to say that the private sector was “doing fine.”
One person’s gaffe might be another person’s overstatement, but the facts aren’t all that difficult to square with what Obama said. Private entities are hiring more employees, indeed many more than they were at the height of the recession, while state and local governments are hiring far fewer workers and are laying off employees at alarming rates. And that’s the fact that Obama intended to emphasize before his mouth got in the way.
The reasons for and the problems resulting from this fact are important, and I’ll explore them in a moment. But first, let’s understand what kind of jobs we’re talking about, because one of the neat tricks the Republicans have been playing in their effort to swing public opinion against the Obama re-election campaign is to create the impression that government jobs are a waste of tax dollars.
Think about it for a moment. When someone mentions “government jobs,” what kind of worker do you envision?
If you have bought into the picture the GOP wants you to see, you are thinking of “mindless bureaucrats” sitting in tiny cubicles alternating between twiddling their thumbs and shuffling papers on their desks. Or, you may be envisioning guys with shovels in their hands standing on the side of the road looking aimlessly for something to shovel.
Those are the two classic stereotypes of what right-wing politicians would like you to think is meant by “government jobs.” And if, indeed, that’s what we are talking about, then we probably could do with a lot less of them.
But, in fact, those aren’t the jobs we’re talking about. Those kinds of jobs really haven’t existed in meaningful numbers at the state and local level for generations (if they ever did), and they only existed at the federal level in sizeable quantities during the Great Depression, when, with unemployment as high as 25 percent, any work was better than no work, even work that didn’t do much but provide a paycheck for a wage earner.
No, the kinds of jobs that are currently diminishing in large numbers are real jobs that provide real services to communities: jobs like teaching and policing and fire-fighting and picking up the trash.
Teachers, police officers, fire fighters, and sanitation workers are not government bureaucrats, nor are they WPA workers. They provide for the education of a community’s children, they safeguard the community’s residences and business establishments, they handle the emergencies (fires and other calamities that all too frequently occur), and they dispose of the community’s trash.
These are clearly jobs that communities need to have done, so why are fewer workers being hired to perform them? Indeed, why are those individuals holding them being laid off or their positions going unfilled when they retire?
Communities are cutting back on their public sector employment for one simple reason: money. Unlike the federal government, which, political discourse aside, can operate in a state of constant indebtedness, state and local governments must balance their books every year. They don’t have the ability to write IOUs to lenders or to create more money to pay existing debts. Our Constitution gives that power to the federal government, but states and municipalities aren’t extended the privilege.
The financial problems that state and local governments now face have resulted from two shifts in the attitudes of voters. The first was born in California in the late 1970s by the initiative vote (the infamous Proposition 13) that drastically reduced property tax revenues in California for local governments. Ronald Reagan then stoked the anti-tax fervor with his presidency in the 1980s, and by the end of that decade, tax revenues for local governments had taken a hit nation-wide, a hit that has continued and become more severe with the years that have followed.
The second shift in attitude is more recent. For it, we have the Tea Party to thank. Their “contribution” has been to cast federal spending in the same negative light as local and state taxes. The result is that federal aid to local governments, long the second way that localities secured the revenues to balance their fiscal books, has been severely reduced.
So those are the principal reasons for the loss of public sector jobs. What about the problems those losses are creating?
Well, the first problem is implicitly obvious from what I’ve already said. Fewer teachers mean lowered education standards. Fewer police officers mean less safe communities. Fewer fire fighters mean less secure communities. Fewer sanitation workers mean dirtier communities.
But the bigger problem is the effect the lowered public-sector employment numbers have on the economy as a whole, and this is the point President Obama was seeking to make last week. And that point is that the loss of these jobs has a ripple effect on the whole economy. It works like this:
When people have jobs, they get paychecks that they use to buy things (call them widgets). When enough people buy enough widgets, the makers of those widgets hire more people to make more widgets. Those people also get paychecks that they also use to buy widgets.
The more widgets companies make, they more people they need to employ to make them. And those people live in communities that grow, and that growth means more homes and gas stations and restaurants and hotels and schools and sporting facilities and movie theaters and all the other things that make a community a desirable place to live.
The key is jobs and the paychecks those jobs provide. And the thing about paychecks is that they all convert to the coin of the realm, no matter whether they are issued by a private company or the local government that hires the teachers and police officers and fire fighters and sanitation workers.
And so, with that understanding of economic reality in mind, here’s what President Obama meant to say:
The private sector is producing jobs, but they’d be producing many more if we had a robust public-sector jobs picture.