15 Apr 2019

Government Is Too Large and Employs Way Too Many People

In his Second Inaugural Address, Thomas Jefferson boasted that his Administration had accomplished:

    “The suppression of unnecessary offices, of useless establishments and expenses. … These covering our land with officers, and opening our doors to their intrusions, had already begun that process of domiciliary vexation which, once entered, is scarcely to be restrained from reaching successively every article of produce and property.”

Kristin Tate argues that Donald Trump needs to be more actively devoted to following Jefferson’s example.

After eight years of reckless expansion of the federal workforce under Barack Obama, Donald Trump vowed to downsize the wildly growing bureaucracy of Washington. In 2016, he promised to “cut so much your head will spin. However, during the first two years of his presidency, there has been no significant effort to reduce the bloated federal payrolls. In fact, the federal government is the largest employer in the nation.

Walmart, which has a presence in communities of all shapes and sizes, is the largest private employer in the nation with 1.5 million workers. Yet the number of Americans who rely on the corporate giant for their livelihoods is dwarfed by the number who rely on the federal government for their paychecks. The federal government employs nearly 9.1 million workers, comprising nearly 6 percent of total employment in the United States. The figure includes nearly 2.1 million federal employees, 4.1 million contract employees, 1.2 million grant employees, 1.3 million active duty military personnel, and more than 500,000 postal service employees.

Many of the individuals serving our nation are high quality workers who provide necessary and worthwhile services. However, there are valid economic reasons to be concerned by the sheer size of the public sector workforce. Government employment operates separately from market forces and causes a disconnect from the economy. During downturns, many businesses have to pull back on operations or payroll, but since Washington has the power of taxation and printing dollars, there is no incentive for tightening its belt beyond vapid election year promises.

As I outlined in an opinion column earlier this year, federal workers often enjoy pay and benefits that private sector workers can only dream of. For example, they receive pay that is 17 percent higher on average than private sector employees who perform comparable work, even though they work 12 percent fewer fewer hours on average. Meanwhile, federal workers face a 0.2 percent chance of getting fired in any given year. That is more than 45 times lower than their private sector counterparts.

While full time federal employee compensation and benefits are above market, at least these figures are relatively transparent and accountable. However, many taxpayers may not realize they are additionally subsidizing a ballooning shadow government of some 5.3 million contract and grant employees. While politicians often promise to cut the size of government, many fail to acknowledge the increasing number of contract workers.

The use of contract workers can be a dangerous means of hiding the true cost of the federal government workforce from the general public. Often contractors are used for practical reasons, like temporary projects not requiring full time employment. But in other cases, these contractors can actually come at a much steeper cost than full time federal workers.

The Pentagon found that hiring contractors was more expensive for most positions than simply using civilian employees. Contract workers are especially costly and often used during times of conflict. From 1999 to 2010, the number of contractors hired by the federal government more than doubled. When you factor in state and local governments, which together employ 7.4 million workers, the entire government workforce as a share of total employment in the nation sits at more than 18 percent.

We cannot sustain ourselves without a public sector workforce. But an increasingly bloated class of government employees in powerful unions and corporations seeking contracts is a recipe for disaster. Government needs to be nimble rather than creating perverse incentives for higher compensation for work that could be done in more productive sectors of the economy. With our $22 trillion debt, programs like the Green New Deal will balloon the federal workforce further and could cost taxpayers more than $90 trillion. We cannot pay for what we have now, even before the promise of the plan to give money to those who are “unwilling to work.”


2 Feedbacks on "Government Is Too Large and Employs Way Too Many People"


Not just too many government workers but they are also grossly overpaid.

JK Brown

The bureaucratization of the society is far worse than just having a lot of government employees. Mises wrote of this in 1945. Following the passage below he spoke of the pre-WWI youth movement in Germany and how those that survived that war became faithful servants of Hitler and we know also subsequently Stalin. The description is far to similar to the “youth” movement of today.

“HIGH-BROWS turn up their noses at Horatio Alger’s philosophy. Yet Alger succeeded better than anybody else in stressing the most characteristic point of capitalist society. Capitalism is a system under which everybody has the chance of acquiring wealth; it gives everybody unlimited opportunity. Not everybody, of course, is favored by good luck. Very few become millionaires. But everybody knows that strenuous effort and nothing less than strenuous effort pays. All roads are open to the smart youngster. He is optimistic in the awareness of his own strength. He has self-confidence and is full of hope. And as he grows older and realizes that many of his plans have been frustrated, he has no cause for despair. His children will start the race again and he does not see any reason why they should not succeed where he himself failed. Life is worth living because it is full of promise.

“All this was literally true of America. In old Europe there still survived many checks inherited from the ancien régime. Even in the prime of liberalism, aristocracy and officialdom were struggling for the maintenance of their privileges. But in America there were no such remnants of the Dark Ages. It was in this sense a young country, and it was a free country. Here were neither industrial codes nor guilds. Thomas Alva Edison and Henry Ford did not have to overcome any obstacles erected by shortsighted governments and a narrow-minded public opinion.

“Under such conditions the rising generation are driven by the spirit of the pioneer. They are born into a progressing society, and they realize that it is their task to contribute something to the improvement of human affairs. They will change the world, shape it according to their own ideas. They have no time to waste, tomorrow is theirs and they must prepare for the great things that are waiting for them. They do not talk about their being young and about the rights of youth; they act as young people must act. They do not boast about their own “dynamism”; they are dynamic and there is no need for them to emphasize this quality. They do not challenge the older generation with arrogant talk. They want to beat it by their deeds.

“But it is quite a different thing under the rising tide of bureaucratization. Government jobs offer no opportunity for the display of personal talents and gifts. Regimentation spells the doom of initiative. The young man has no illusions about his future. He knows what is in store for him. He will get a job with one of the innumerable bureaus, he will be but a cog in a huge machine the working of which is more or less mechanical. The routine of a bureaucratic technique will cripple his mind and tie his hands. He will enjoy security. But this security will be rather of the kind that the convict enjoys within the prison walls. He will never be free to make decisions and to shape his own fate. He will forever be a man taken care of by other people. He will never be a real man relying on his own strength. He shudders at the sight of the huge office buildings in which he will bury himself. ”

von Mises, Ludwig (1945). Bureaucracy


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