The headline is not referring to the infectious disease per se, but the impact of the shutdown on public sector employment – especially those working at the state and municipal levels.
There are approximately 20 million Americans employed by our state and local governments. There are another 2.1 million federal employees – not including the military (1.4 million active, 1 million reserves) and postal workers (600,000). This does not include those in the private sector who derive their incomes from government grants and contracts.
Most Americans recognize that our public sector workforce includes an excess of workers. Some estimates of the overage are as high as 20 percent – especially if you consider that so many of the current functions of government are unnecessary, duplicative, wasteful or counterproductive.
We should also keep in mind that bureaucrats are paid more and get better benefits (think health benefits and pension plans) than their private sector counterparts. They also have unprecedented job security. The notion that they are underpaid public servants went out with the buggy whip.
Well … it turns out that Covid-19 may be doing what fiscally responsible elected officials – if there are any – have been unable to achieve for decades – trim the bureaucracy.
The good news in the May jobs report was that America created more than 2 million new jobs. That was a shocker to the economic doomsayers who predicted – and in some cases hoped – that more jobs would be lost. In that report the construction sector added 464,000 jobs, retail 368,000, Healthcare 312,000, and manufacturing, 225,000.
Government workers – bureaucrats – did not fare so well. Public sector employees lost 585, 000 jobs in May. While that creates an unfortunate problem for those who lost their jobs, it is good news for the economic health of the nation. Based on the average wage and benefit costs, that represents a saving to the taxpayers of between $70 and $90 billion dollars.
The hardest impact is on the state and municipal workers because our states and cities are required to operate under balanced budgets. They cannot engage in ever-increasing deficit spending to cover excessive, reckless and irresponsible spending.
As one might expect the big-government Democrats and the public sector unions are squealing like poked pigs. Deploying their usual scare tactic, they are claiming that cutting payroll will lose “essential workers” – police, firefighters, health workers and dog catchers.
In a well-managed operation, when cuts in staffing must be made, it is the least essential that should go first – the fat, the deadwood, the placeholders. Any mayor who cuts police and fire before cutting a few of the guys off the pothole filling crew is dangerously incompetent.
Government revenues are dropping as the lockdown reduces taxes of all sorts – sales taxes, licensing fees, parking tickets. It is highly unlikely that the states and cities will be able to re-hire all those who got laid off. Several Democrat-controlled states and cities were already on the brink of default due to longstanding fiscal irresponsibility. Covid-19 has just added to their crisis – maybe even an economic coup de grace.
We can feel sorry for those who lost their jobs, but they can at least be thankful for riding aboard the government gravy train for as long as they did. And we can be happy that government spending will be dropping just a wee bit.
So, there ‘tis.