Limbaugh Claims Public-Sector Jobs “Do Not Contribute To Economic Growth”

Limbaugh: The Idea That Police, Teachers, And Firefighters Contribute To Economic Growth Is “Ignorance ... 101.” From the June 11 edition of Premiere Radio Networks' The Rush Limbaugh Show:

LIMBAUGH: Look, as nice as they are to have -- teaching jobs, fireman, policeman -- they are all paid for with money out of the private sector. They are paid for with tax revenue from citizens. They cut into the amount of money left for private-sector jobs. They don't grow the number of private-sector jobs; they reduce them. Now, I've got to be very careful here because nobody is against teachers or firemen or cops. But those are public-sector jobs. Look at the way these people think. They're combining two things here: A, the never-ending appeal to tax revenue for firemen, cops, and teachers. That is the education of your kids and the safety of you and your house and your family. And they're trying to say that those jobs are being cut, and now we're not safe, and your kids aren't being educated, and that's because the private sector is being too selfish and too greedy and so forth. I, look -- this is where I have to be very careful. Nobody is opposed to cops or firefighters or teachers, but they aren't private-sector jobs. They do not contribute to economic growth. Their purpose is otherwise. They have an entirely different purpose: public safety, public education. But there's no growth in the economy if you add those jobs. If there aren't other types of private-sector jobs added, while at the same time we're adding to the fire rolls and the cops rolls and teachers, we are reducing the size of the private sector. This is Marxism 101, this is -- it's also ignorance and sophistry 101. [Premiere Radio Networks, The Rush Limbaugh Show, 6/11/12,]

Limbaugh: Public-Sector Workers “Have A Value, But It's Not Measured In The Same Way That Traditional Economic Output Is.” From the June 12 edition of Premiere Radio Networks' The Rush Limbaugh Show:

LIMBAUGH: There is value in what these people do. This touches on the whole argument about productivity in the sense that there's no entrepreneurism in being a police officer and that there's no productivity, maybe so, but there's value. And the value has to be calculated. And it's a mistake to try to calculate that value the way we calculate the value of entrepreneurism or commerce or what have you. There are measurable ways to determine productivity. And there are with teachers -- how well do the students do, for example, is one way. But there's no direct financial relationship until you find out how well the student does in the world. And who can keep track of all that?

[...]

Education and security have always been part of the private sector. I did not mean to say that there is no value created yesterday when I was talking about the job of teaching, policing, and firefighting. They are fundamental to the assurance that we have a civil society in which economic activity can flourish.

[...]

We don't have a shortage of teachers, but you listen to Obama -- we don't have a shortage of police officers, we don't have a shortage of firefighters. But listen to these guys though, we need more of them, and that equals economic growth, this equals a solution to our economic problems, and of course it doesn't. And again, not to offend about that work but -- and I said yesterday, when was the last time you went to a police officer, or teacher, or a firefighter to apply for a job? They have a value, but it's not measured in the same way that traditional economic output is. [Premiere Radio Networks, The Rush Limbaugh Show, 6/12/12, via Media Matters]

But Public-Sector Employment Does Contribute To Economic Growth

Brookings Institution: “Increased Government Employment Means Increased Government Spending, Which Means Increased Demand For Goods And Services.” In June 2011, Howard Wial of the Brookings Institution observed that “government job growth is associated with the economic recovery of America's metropolitan areas” since 14 out of the 20 large metro areas with the strongest recoveries from the recession “gained government jobs since total employment began to recover in each metro area.” By contrast 12 of the 15 major metro areas with the slowest recoveries “lost government jobs since total employment began to recover.” Wial also noted that increased government employment boosts private-sector jobs and income:

I haven't been able to find anything else besides the growth of employment that's as closely associated with the strength of metropolitan economic recovery. Increased government employment means increased government spending, which means increased demand for goods and services and the creation of more private sector jobs and more private sector income. [The Brookings Institution, 6/22/11]

Wash. Post's Ezra Klein: Public-Sector Workers Spend Their Earnings “In Their Local Grocery Store, Or On Their Kids. They Contribute To The Economy.” On the June 11 edition of MSNBC's The Rachel Maddow Show, The Washington Post's Ezra Klein discussed the economic impact of government employment on the economy:

KLEIN: When the government employs somebody, it is a real job. A teacher is employed, a police worker is employed, a park ranger is employed. That person gets a check. They spend that money in their local grocery store, or on their kids. They contribute to the economy. [MSNBC, The Rachel Maddow Show, 6/11/12, via Media Matters]

Economist Dean Baker: “A Dollar ... Has The Same Impact On Demand And Growth Whether It [Is] Spent By A Public Sector Worker Or” A Private-Sector Worker. In an email to Media Matters, Dean Baker, co-director of the Center for Economic and Policy Research, explained the impact of public-sector spending on the economy, writing: “But seriously, a dollar is a dollar. It has the same impact on demand and growth whether it [is] spent by a public sector worker or whether it is spent by someone employed in the private sector. This is just silliness.” [Email to Media Matters, 6/12/12]

Former Labor Secretary Robert Reich: All Workers “Are Consumers, And Consumer Spending Is 70 Percent Of Economic Activity.” In a February 3 blog post, former Labor Secretary Robert Reich wrote:

When they're not blaming Obama for a bad economy, Republicans are decrying the federal budget deficit and demanding more cuts. But America's jobs deficit continues to be a much larger problem than the budget deficit.

In fact, we can't possibly achieve the growth needed to reduce the budget deficit as a proportion of the total economy unless far more people are employed. Workers are consumers, and consumer spending is 70 percent of economic activity. And cutting the budget means fewer workers, directly (as government continues to shed workers) and indirectly (as government contractors have to lay off workers) and therefore fewer consumers. [RobertReich.org, 2/3/12]

CBPP: Public-Sector Spending “Stimulate[s] Economic Growth In The Short Run And Is Among The Most Important Determinants Of Economic Growth And Job Quality In The Long Run.” From a February 8 report by the Center on Budget and Policy Priorities:

Deep cuts to state services also erode the foundations of a strong economy, in both the short and long term. Spending on education, transportation, and public safety has been shown to stimulate economic growth in the short run and is among the most important determinants of economic growth and job quality in the long run. Research also shows that expanding and improving upon these investments through well-targeted tax increases (in other words, finding new money to pay for better services) stimulates income and job growth. [Center on Budget and Policy Priorities, 2/8/12]

And Experts Note Public-Sector Job Losses Damage The Overall Economy

WSJ: Unemployment Rate Would Be Near 7.1 Percent Without Government Job Cuts. Wall Street Journal reporter Justin Lahart stated that, all things equal, “if there were as many people working in government as there were in December 2008, the unemployment rate in April would have been 7.1%, not 8.1%.” Lahart's post included the following chart:

[The Wall Street Journal, Real Time Economics, 5/8/12]

Economist Mark Zandi: “Job Losses At State And Local Governments Is The Most Serious Weight On The Job Market.” From an April 29 Washington Post article:

The state and local job losses are significant for several reasons, economists say. For one, these losses have a broad social impact. Laying off teachers means larger class sizes and fewer after-school programs, for example.

What's more, federal aid can go directly to state and local governments to prevent job losses, a relatively effective way to sustain economic growth. (Tax cuts, by contrast, can lead indirectly to job growth if they increase the amount of money consumers spend.)

“The job losses at state and local governments is the most serious weight on the job market,” said Mark Zandi, chief economist at Moody's Analytics, who has advised both parties.

[...]

Experts worry that the cuts will have lasting effects.

“There's a big body of research showing that a lot of the things that state and local governments spend their money on have long-term effects on the economy and society as a whole,” said Nicholas Johnson, vice president for state fiscal policy at CBPP. “Cutting school funding now can hurt the education of a future workforce.” [The Washington Post, 4/29/12]

Economist Scott Brown: Economy Would Likely Be Growing A Full Percentage Point Faster Without Drag From Government Job Losses. From a June 6 ABC News report:

“The government is actually contributing to the slow recovery,” said Scott Brown, the chief economist at the Florida-based financial firm Raymond James & Associates.

Brown said that if it were not for the “drag” of this public sector job loss, the economy would likely be growing a full percentage point faster, with GDP growing at 3 percent rather than at 2 percent.

“That would help mop up the jobs lost during the downturn,” he said. “Factor in the drag from government and we are growing at a pace that's roughly enough to absorb the growth in population but not fast enough to make up much of the ground lost.” [ABC News, 6/6/12]

Economist Joel Naroff: When The Public Sector Cuts Jobs, “The Private Sector Gets Affected.” A September 2, 2011, U.S. News & World Report article quoted economist Joel Naroff as saying that “the private sector gets affected” by public-sector job losses. From U.S. News & World Report:

Those job losses are taking their toll on the national economic scene, and are in their own way creating more job losses in the private sector. “If we're losing [20,000 to 25,000] in the public sector, that's income and spending that doesn't occur. It's more like [35,000 to 40,000] jobs as a result of that,” says Joel Naroff, president of Naroff Economic Advisors, an economic consulting firm based in Holland, Pennsylvania. “So one job isn't just one job; it's more than one job. And so the private sector gets affected,” he says.

Behind those government job losses are budget cuts, particularly from states and local governments, many of which have lost revenues as lower incomes and lower property values lead to lower tax income. Those budget cuts mean fewer government contracts, which also leads to pain in the private sector. The winding down of the stimulus package also contributed to these losses, as federal assistance to state governments for things like extra Medicaid funding has disappeared, leaving many states with substantial budget gaps.

Altogether, the strain on the national economy is considerable. “There's no such thing as a free budget cut.” Says Naroff. “If the public sector trims [20,000 to 25,000] jobs a month, then the private sector has to create those jobs before the economy can add one job. That's the hole that the public sector puts the economy in at this particular point,” he says. [U.S. News & World Report, 9/2/11]

CBPP: Government Job Losses Hurt Those Who Don't Work In Government. From a February 8 report by the Center on Budget and Policy Priorities:

Here's how the economic damage from spending cuts happens: when lawmakers cut services they end contracts with private sector businesses and reduce spending on private sector goods, leading to layoffs or lower wages among private sector workers. When lawmakers cut services they also lay off teachers, firefighters, police officers, and other public sector workers (over 650,000 state and local government workers have lost their jobs since the recession hit the states). In turn, private AND public sector workers who are laid off, or who see their pay reduced, buy less and further reduce economic activity.

Deep cuts to state services also erode the foundations of a strong economy, in both the short and long term. Spending on education, transportation, and public safety has been shown to stimulate economic growth in the short run and is among the most important determinants of economic growth and job quality in the long run. Research also shows that expanding and improving upon these investments through well-targeted tax increases (in other words, finding new money to pay for better services) stimulates income and job growth. [Center on Budget and Policy Priorities, 2/8/12]

Wash Post.'s Klein: Public-Sector Job Losses Are A Problem That The Federal Government Could Actually Fix. In a June 8 post on The Washington Post's Wonkblog, Ezra Klein wrote:

Speaking of private-sector jobs, at this point the Obama presidency is net positive on private-sector jobs. Since February of 2009 - remember, Obama wasn't president for most of January -- the economy has added, on net, 780,000 private-sector jobs. Hence the president's comments: The private sector's job creation machine is basically working, even if it would be nice to see it working faster. The public sector, conversely, has been losing jobs.

As a disclaimer, these numbers don't tell you very much. The bulk of the job losses came in early 2009, when Obama had just entered office and when his policies hadn't yet taken effect. Blaming him for what happened to the labor market in, say, March of 2009 is like blaming a firefighter for the damage the fire causes as his truck is pulling up. And even at this point in his presidency, the economy is driven by much more than his policy preferences. Europe, for instance.

That said, the place where you can most fairly blame the government for the shape of the labor market is in public-sector jobs. The federal government can choose to hire, fire or hold employment steady. It can give states money to keep emmployees on the job, or it can withhold that money. So the fact that the public sector is losing jobs isn't just a problem, but a problem that the federal government could, with 100 percent certainty, fix. [The Washington Post, Wonkblog, 6/8/12]