If Public Sector Payrolls Were at 2009 Levels, The Unemployment Rate Would Be 8.4 Percent

According to the Bureau of Labor Statistics, the private sector added 154,000 jobs in July, while the public sector lost 37,000. And this is by no means a new phenomenon. As Matt Yglesias reported last month, the federal government alone has lost more than 500,000 jobs since President Obama took office.

All in all, BLS has found that federal, state, and local government payrolls fell by 1,130,000 between June 2009 and July 2011. So if government payrolls were the same today as they were back in 2009, the unemployment rate would be significantly lower, standing at 8.4 percent, instead of the current 9.1 percent. On the graph below, the darker line is the actual unemployment rate, while the lighter line is what it would have been in the absence of public sector layoffs:

In fact, without all the public sector layoffs, the unemployment rate never would have gone above ten percent. Despite the fact that private sector employment has been growing for months, while the public sector has been hemorrhaging jobs, Speaker of the House John Boehner (R-OH) still reacted to Friday’s jobs report by blaming lackluster job growth on Congress’ “spending binge.” Earlier this week, Sens. Tom Coburn (R-OK) and Orrin Hatch (R-UT) introduced legislation to layoff another 300,000 federal employees.

Sean Savett

Center for American Progress Director for Tax and Budget Policy Michael Linden produced the chart for this post.