Public vs. Private Employment During Our Recession

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This week, Mercatus Center Senior Research Fellow, Veronique de Rugy examines unemployment during the Recession.

From January 2008 to January 2010, over 8 million workers lost their jobs, 878,000 workers left the labor force, and the unemployment rate nearly doubled from 5.0% to 9.7%.

Changes in employment in the public and private sector make plain that unemployment is distributed unequally across the economy. In the above chart, Veronique de Rugy compares the changes over the past two years in public and private sector employment.

Using two axes, this graph superimposes government employment with private sector employment. Two axes have been used to more clearly show the relative trends in public and private employment, not to imply any equivalence in the magnitude of these changes. In other words, this chart does not claim that at any point in time, public employment was larger than private employment.

During the time period examined, private employment continuously decreased, with only 1 month showing a month-over-month increase in employment. Conversely, employment in the government was much more volatile in the period, with 12 months of positive employment growth interspersed with 12 months of decreases in employment.

On net, the number of government employees has increased during the last two years. Since January of 2008, the number of public employees has increased from 22.3 million in January 2008 to 22.4 million in January 2010, after peaking at 22.6 million in July 2009. In the same time, the number of private jobs decreased from 115.5 million in January 2008 to 107 million. While the public sector gained almost 100,000 jobs, 8.5 million jobs were lost in the private sector.

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