Right numbers, wrong conclusion? Breaking down the 2023/2024 spike in government hiring

Key Concepts:

• Job growth drivers in 2023-2024
• Government and government-adjacent sectors (healthcare, education)
• Historical norms vs. current employment levels
• Impact of the pandemic on employment
• Government efficiency and incentives
• Waste, fraud, and abuse in government spending
• Role of government in the economy

Job Growth Analysis (2023-2024)

• Main Point: Job growth in 2023-2024 was significantly driven by government and government-adjacent sectors.
• Data: 81% of all job growth in 2024 came from local, state, and federal governments, private education, and healthcare.
• Breakdown:
  • Healthcare and private education accounted for 53% of all job growth.
  • Local government followed.
  • The federal government was responsible for only 4% of the hiring.
• Source: Data crunched for CNBC by Wendy Ellenberger of the Brookings Institute.

Historical Context and Pandemic Impact

• Main Point: The surge in government and adjacent sector hiring was largely a rebound from pandemic-related under-hiring.
• Data: These sectors lost 1.5 million jobs in 2020.
• Analysis: The recent hiring brought these sectors back to historical norms.
• Healthcare Trend: Healthcare had to bounce back to get its share back up, but it's also a bounce back to trend, and that trend has been upward sloping for a long time.
• Ten-Year Average: All these sectors are near their ten-year average, 2% of total employment at 31.4%.

Government Size and Efficiency

• Main Point: While government and adjacent sectors drove job growth, their current size is not necessarily "bloated" compared to historical averages.
• Perspective: Joe argues that there is no incentive for government to be efficient because it doesn't need to match income and expenses.
• Counterargument: Steve points out that the federal government's share of employment is close to its long-run average.
• Joe's Analogy: Compares government to a company that never has to downsize, implying a lack of accountability.
• Steve's Rebuttal: Argues that government provides essential services that the private sector cannot.

Government Spending and Waste

• Main Point: The discussion touches on the issue of waste, fraud, and abuse in government spending.
• Joe's Argument: Suggests that government spending is often wasteful and inefficient.
• Counterargument: Waste, fraud, and abuse should not be synonyms for policies you disagree with.
• Example: Disagreement over sending money to vaccinate people in Africa.
• Perspective: There is likely waste, fraud, and abuse in both programs that are agreed with and disagreed with.

Long-Term Trends and Future Considerations

• Healthcare Growth: The upward trend in healthcare employment is driven by the aging population and increasing healthcare needs.
• Government's Role: The debate touches on the appropriate size and scope of government.
• Historical Comparison: Joe wants to go back to where that it was not totally overgrown.
• Department of Education: Do we need a Department of Education?
• Data Request: Steve will provide data on 20 and 30-year averages to show how government employment has changed over time.

Notable Quotes:

• "Health care had to bounce back to get its share back up, but it's also a bounce back to trend, and that trend has been upward sloping for a long time." - Steve Liesman
• "There's no incentive for government to be efficient." - Joe
• "Waste, fraud, and abuse should not be synonyms for policies you disagree with." - (Speaker not explicitly named)
• "I'm from the government and I'm here to help." - Quoting Ronald Reagan

Synthesis/Conclusion:

The analysis reveals that recent job growth has been heavily influenced by government and government-adjacent sectors, particularly healthcare. However, this growth largely represents a recovery from pandemic-related job losses and a return to historical employment levels. The discussion also raises important questions about government efficiency, spending, and its appropriate role in the economy, with differing perspectives on whether the current size of government is justified. The long-term upward trend in healthcare employment is a key factor to consider when evaluating these trends.