Tuesday, August 28, 2012

Payrolls During President Obama's Term

What's the direction of the jobs picture?

Total non-farm payrolls (the early/mid 2010 spike in the curve is because of temporary census activity):
Total non-farm payrolls: All Employees: Total nonfarm from February 2009 through July 2012, showing turn-around in decline in February 2010 and job growth since February 2010

Private payrolls:
Total private payrolls: All Employees: Total Private Industries from February 2009 through July 2012, showing turn-around in decline in February 2010 and job growth since February 2010

Government payrolls (trend of state/local budget cuts bringing govt employment down):
Total Govt Payrolls: All Employees: Government from February 2009 through July 2012, showing state/local budget cutting impact in declining government employment that slightly diminishes the growth since February 2010 in total jobs

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3 comments:

  1. Daniel JonesAugust 28, 2012 at 8:08 PM

    so when government payrolls go down private sector payrolls go up?

    this is still far too broad, these graphs are almost entirely irrelevant as they represent no specific details.

    does private mean with or without government funding of any kind?

    i feel as though its untruthful to say anything is private anymore, as in absent of government money, coersion, or regulations, under those conditions no such private sector market exists so it's impossible to get a real picture of what a 'private' sector would look like.

    although, i do think direct government employee payrolls shrinking is ultimately a good thing for the economy, a real private sector would also be as well.

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  2. State of ThoughtSeptember 7, 2012 at 1:23 PM

    > so when government payrolls go down private sector payrolls go up?

    No, no such causation link is implied. These graphs only show that private payrolls reached a floor and recovered while govt payrolls have been slashed. They do not imply any direct link between the two.

    In fact, Keynesian economics would argue that it's quite the opposite: that private payrolls recovered *despite* the slashing of govt payrolls and would have likely recovered more strongly if govt payrolls had not been slashed. ...and perhaps even more robustly yet if govt payrolls had been increased.

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  3. State of ThoughtSeptember 7, 2012 at 1:28 PM

    As there's no shortage of labor and a significant shortage of demand for goods and services (versus what would be required to attain full employment).

    This means that -- in the current economic environment -- slashing of govt payrolls should directly hurt the private sector's ability to maintain/increase payrolls. Various measures, including the ARRA, have supported the private sector in other ways and dwarfed the impact of govt layoffs. But one can reasonably expect that we'd have had a more robust recovery if we'd avoided reducing govt payrolls.

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