The True Size of the Government Workforce is Unimaginable

Key Concepts

• Official Federal Workforce vs. Total Government Workforce: The distinction between the commonly cited number of direct federal employees and the much larger number of individuals funded and supported by the government through various means.
• Contractors and Grant Recipients: Individuals and entities working for or funded by the government who are not direct civil service employees.
• W2 Employee vs. 1099 Contractor: Legal distinctions in employment that, while having tax and regulatory implications, do not alter the fundamental reality of being paid to perform work for an entity.
• Free Market vs. Government Funding: The core argument that government-funded entities, regardless of their structure, operate differently from businesses driven by voluntary exchange and profit motive.
• Resource Drain and Wealth Destruction: The perspective that government spending, funded by taxation, represents a net drain on wealth as it diverts resources from productive private sector activities.
• Taxation and Production: The relationship between those who produce goods and services and those who are funded by the redistribution of that production through taxes.

The True Size of the Federal Government's Workforce

The common narrative that the federal government's workforce has remained stagnant for decades, around 3 million employees, is presented as a misdirection. While the number of official civil service employees has indeed hovered around this figure since the 1990s (after increasing from 2 million to 3 million between 1950 and 1990), this statistic omits a significant portion of individuals who work for and are funded by the government.

Breakdown of Government-Funded Personnel (as of 2023)

• Civil Service Employees: Approximately 2.1 million.
• Military Personnel: Over 1 million.
• Postal Service Employees: About 0.5 million.
• Government Contractors: A staggering 5.2 million.
• Grant Recipients: An additional 2.3 million.

When these categories are combined, the total number of people employed or funded by the federal government reaches approximately 11.3 million. This figure is significantly larger than the commonly cited 3 million and represents individuals whose compensation is derived from taxation.

The Role of Contractors and Grant Recipients

The video argues that contractors and grant recipients, despite being employed by private entities or organizations, are effectively extensions of the government. The reasoning is that their existence and funding are heavily reliant on government contracts and grants, which are ultimately funded by involuntary taxation.

• Contractors: The argument is made that many contractors would not exist without the government as their primary customer. When a private company's primary customer is the government, and its funding is derived from taxation, it is not operating in a true free market. The government contract allows these entities to capitalize on taxation, taking money from individuals by force and distributing it. This is contrasted with free market businesses that must voluntarily convince customers to pay for their products or services.
• Grant Recipients: Similarly, individuals receiving funds through grants are seen as working for the government, regardless of their research or university affiliation. The core principle is that if one's paycheck is directly provided by the government, they are, definitionally, a government employee.

The Broader Government Workforce: State and Local Governments

The analysis extends beyond the federal level to include state and local government employees.

• State Government Employees: Approximately 5.15 million.
• Local Government Employees: Approximately 15 million.

Adding these to the federal workforce (including contractors and grant recipients) brings the total number of government employees to over 32 million. This figure is derived from:

• Federal, State, and Local Employees (excluding military, CIA, NSA, etc.): Over 23.12 million (as of August 2025, with some data from 2023).
• Military: Approximately 1 million.
• Contractors: Approximately 5.2 million.
• Grant Workers: Approximately 2.3 million.

This conservative estimate of over 32 million people represents approximately 10% of the entire US population.

The Economic Implications of Government Employment

The video presents a perspective on the economic impact of this large government workforce, drawing a distinction between free market activity and government-funded employment.

Free Market vs. Government Funding

• Free Market: Operates on the principle of voluntary exchange driven by self-interest and profit. Individuals and businesses are motivated by the prospect of earning more than they spend. This leads to efficient allocation of resources and the production of goods and services that people voluntarily desire.
• Government Funding: Relies on taxation, which is an involuntary taking of resources. Government employees are paid from this pool of collected wealth, not from the direct voluntary exchange of goods or services in the market.

The Concept of "Drain on Resources"

The argument is made that government activity, by its nature, is a drain on resources and a net destruction of wealth. This is because it diverts capital and labor from the productive private sector. Even if government jobs are deemed necessary or beneficial, they are fundamentally funded by taking from what others have produced.

The Burden on Producers

The video highlights the disproportionate burden placed on those who are actively working and producing in the free market.

• Total US Population: Approximately 334 million.
• People with Jobs (any job): Approximately 163 million (according to the Federal Reserve). This includes individuals with part-time or multiple jobs.
• Proportion of Producers: If approximately half the population works, and 10% of the total population works for the government, then for every 10 people, 5 are working, and 1 of those 5 works for the government. This means approximately 4 out of 10 people are actively producing to support everyone else, including those who don't work and those who work for the government.

The implication is that a small minority of the population is responsible for generating the wealth that supports the majority, including a significant portion of government employees.

Arguments and Perspectives

The central argument is that the commonly presented figures for the federal workforce are misleading and that the true scale of government employment is vastly larger. This scale, funded by taxation, represents a significant diversion of resources from the productive private sector.

Key Arguments:

1. Misleading Statistics: The focus on official federal employee numbers ignores the substantial workforce of contractors and grant recipients.
2. Government as a Customer: When the government is the primary customer for private entities, these entities function as extensions of the government, not as true free market businesses.
3. Involuntary Funding: Government employment is ultimately funded by involuntary taxation, creating a system where a portion of the population is supported by the forced labor of another portion.
4. Economic Drain: Government spending, by definition, represents a drain on wealth because it is not generated through voluntary exchange but through the redistribution of existing wealth.
5. Burden on Producers: The growing government workforce places an increasing burden on the shrinking proportion of the population actively engaged in productive economic activity.

Supporting Evidence:

• Numerical Data: The video provides specific figures for civil service employees, military, postal workers, contractors, and grant recipients to illustrate the scale of the government workforce.
• Economic Principles: The distinction between voluntary exchange in the free market and involuntary taxation is used to support the argument about resource drain.
• Analogies: The comparison between W2 and 1099 employees helps to illustrate that the legal classification does not negate the reality of being paid to perform work.

Conclusion and Takeaways

The video argues that the perception of a stable and manageable federal workforce is a misrepresentation. The true number of individuals funded by the government, including contractors and grant recipients, is significantly larger and has grown substantially. This growth, funded through taxation, is presented as a drain on the productive capacity of the nation, placing an increasing burden on the minority of the population that actively generates wealth. The core takeaway is that the scale of government employment, when viewed holistically, is a critical factor in understanding the nation's economic health and the distribution of its resources. The video suggests that a re-evaluation of this scale is necessary, advocating for a potential reduction in government employment to alleviate the burden on producers and foster a more robust free market.