BUSINESS
08/05/2016 12:22 pm ET

Here's An Obama-Era Legacy No One Wants To Talk About

Government jobs have fallen.
The total number of government employees has dropped by 400,000 under President Barack Obama as of the latest numbers from Ju
Gary McCullough/AP
The total number of government employees has dropped by 400,000 under President Barack Obama as of the latest numbers from July's jobs report.

A vastly underappreciated legacy of Barack Obama’s presidency is one that neither his conservative opponents nor his liberal allies like to mention: He’s presided over a historically unprecedented reduction in government employees.

Yes, you read that right: as the private sector added just over 10 million jobs to the economy, the total number of government employees has dropped by 400,000 under Obama as of the latest numbers from July’s jobs report.

The total number of government employees, by the hundreds of thousands.
St. Louis Fed, BLS
The total number of government employees, by the hundreds of thousands.

This decline is significant because the total number of government employees grew under every president since Dwight D. Eisenhower. Yes, that means the number of government employees grew under every Republican president, including Ronald Reagan.

But here’s maybe an even more shocking fact: Since 2008, the number of residential construction jobs in the U.S. has dropped by 166,000. In the wake of a historically unprecedented American housing crisis, the drop in the number of public sector jobs has been twice as big as the number of homebuilders.

The decline has come at the state and local level. It coincides with state and local budgets around the country being slashed. Federal public sector jobs have been basically flat for the past eight years ― if you strip out the temporary bump for the hiring of short-term workers once a decade for the census.

The number of federal government employees, by the hundreds of thousands.
St. Louis Fed, BLS
The number of federal government employees, by the hundreds of thousands.

Outside the realm of economic wonks, this historic reversal in total government employment is under-discussed, largely because it doesn’t really suit anyone to talk about it. Republicans don’t want to draw attention to it because doing so would be an admission that Obama hasn’t necessarily overseen some sort of reprehensible expansion of government. And Democrats don’t want to trumpet a reduction in government jobs because they historically have supported increasing the number of public sector employees.

Of course, the reduction of government employees at precisely the time when the U.S. economy was trying to recovery from the worst economic crisis since the Great Depression was in many ways counterproductive. At the end of Obama’s first-term, economists Ben Polak and Peter Schott called the reduction in state and especially local government jobs “America’s hidden austerity program.”

In other words, Obama passed a stimulus package while state and federal governments passed anti-stimulus legislation. Thankfully, the economy and the job market recovered, albeit without meaningful wage or wealth increases.

But government jobs never bounced back: austerity won.

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