Makers and Takers

Right on the heels of my post, "A Factoid On A City On Steroids (Supplied By You)" comes Stephen Moore in the Wall Street Journal writing "We've Become a Nation of Takers, Not Makers".  Moore points out that more Americans now work for the government than in manufacturing, farming, fishing, forestry mining and utilities combined.

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

It gets worse. More Americans work for the government than work in construction, farming, fishing, forestry, manufacturing, mining and utilities combined. We have moved decisively from a nation of makers to a nation of takers. 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. Is it any wonder that so many states and cities cannot pay their bill

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 not-so Golden State now has an incredible 2.4 million government employees—twice as many as people at work in manufacturing. New Jersey has just under two-and-a-half as many government employees as manufacturers. Florida's ratio is more than 3 to 1. So is New York's.

It is ironic that the only two states that actually have more manufacturing workers than government workers, Indiana and Wisconsin, have been the states at the forefront of the efforts to bring some balance to the public sector union issue.  That says a lot about Mitch Daniels and Scott Walker for showing leadership on the issue.

As Moore points out, this statistic is as much about productivity gains in manufacturing and farming in the private sector as it is about a bloated public sector.  We simply produce far more output per worker than in the past.  There is a reason for less jobs in manufacturing and farming as a result.  However, in education, it has gone the other way.

Over the period 1970-2005, school spending per pupil, adjusted for inflation, doubled, while standardized achievement test scores were flat. Over roughly that same time period, public-school employment doubled per student, according to a study by researchers at the University of Washington. That is what economists call negative productivity.

The same is true of almost all other government services. Mass transit spends more and more every year and yet a much smaller share of Americans use trains and buses today than in past decades. One way that private companies spur productivity is by firing underperforming employees and rewarding excellence. In government employment, tenure for teachers and near lifetime employment for other civil servants shields workers from this basic system of reward and punishment. It is a system that breeds mediocrity, which is what we've gotten.

Most reasonable steps to restrain public-sector employment costs are smothered by the unions. Study after study has shown that states and cities could shave 20% to 40% off the cost of many services—fire fighting, public transportation, garbage collection, administrative functions, even prison operations—through competitive contracting to private providers. But unions have blocked many of those efforts. Public employees maintain that they are underpaid relative to equally qualified private-sector workers, yet they are deathly afraid of competitive bidding for government services.

This is why the efforts to restore some balance in the relationship between public sector employees and the public they serve (and who pay their salaries and benefits) is so critical to our nation's future. Despite all of the efforts of the unions to make this about workers' rights, this is just another example of putting special interests above the public interest. What about taxpayer rights? What about the public's rights? Moore puts it in the proper context with FACTS. Another inconvenient truth for the public sector union lobby.


I would be remiss when talking about Makers and Takers than to refer you to the book by Peter Schweizer where I first saw these words strung together. It is an excellent read about "why conservatives work harder, feel happier, have closer families, take fewer drugs, give more generously, value honesty more, are less materialistic and envious, whine less... and even hug their children more than liberals". Check it out.