NCPA - National Center for Policy Analysis

More Americans on the Government Payroll

April 5, 2011

If you want to understand better why so many states are teetering on the brink of bankruptcy, consider this depressing statistic:  Today in America there are nearly twice as many people working for the government (22.5 million) than in all of manufacturing (11.5 million).  This is an almost exact reversal of the situation in 1960, when there were 15 million workers in manufacturing and 8.7 million collecting a paycheck from the government, says Stephen Moore, senior economics writer for the Wall Street Journal.

  • More Americans work for the government than work in construction, farming, fishing, forestry, manufacturing, mining and utilities combined.
  • Nearly half of the $2.2 trillion cost of state and local governments is the $1 trillion-a-year tab for pay and benefits of state and local employees.
  • Every state in America today except for two -- Indiana and Wisconsin -- has more government workers on the payroll than people manufacturing industrial goods.
  • Consider California, which has the highest budget deficit in the history of the states: The state now has an incredible 2.4 million government employees -- twice as many as people at work in manufacturing.

Don't expect a reversal of this trend anytime soon.  Surveys of college graduates are finding that more and more of our top minds want to work for the government.  Why?  Because in recent years only government agencies have been hiring, and because the offer of near lifetime security is highly valued in these times of economic turbulence, says Moore.

Source: Stephen Moore, "We've Become a Nation of Takers, Not Makers," Wall Street Journal, April 1, 2011.

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