By Dan Varroney
Government is creating jobs. The private sector is not.
No surprise there, as this Administration is all about creating government jobs, even if it harms private sector job growth. In fact, for the sixteen million unemployed Americans, the federal government is often the only one hiring. In contrast to growing government, the private sector has been relatively stagnant in creating new jobs. The Gallup job creation index for April shows a 2 to 1 lead in federal government hiring over the private market.
There is a causal relationship. A bigger government means more taxes (and/or debt to fund it), less national income, less economic growth, and a private sector creating fewer jobs.
In two short years, President Obama has done plenty to enlarge the size of the federal government.
ObamaCare will create a gigantic 159 agency health bureaucracy to administer the new health care entitlement.
The Minerals Management Service will be bisected (read: expanded) in response the Gulf oil spill, an action taken before the spill is even contained.
Since taking office, the President has created dozens of additional “czar” positions in the White House.
The federal government currently owns two of the nation’s auto manufacturers and, with an assist from the previous administration, invested billions of taxpayer dollars in bailing out failed financial institutions.
Meanwhile, the President’s plan to boost the private sector, the $862 billion stimulus, has been a complete failure. The administration promised unemployment would remain below 8% with the stimulus in place, yet we’ve been above that point for fifteen months and counting.
Every state except for North Dakota and Alaska has lost jobs in the past year. The one place that is thriving and creating jobs is Washington, DC, which needs more public sector employees to run the bloated federal bureaucracy.
Of course, a job with Uncle Sam is a pretty good deal. The federal government employs 2 million civilian employees costing taxpayers over $200 billion a year. According to USA Today, federal employees earn higher salaries than comparable private sector positions in 80% percent of occupations. A “recreation worker,” for example, makes $43,630 annually working for the federal government. In the private sector, a similar position pays just $21,671.
And public sector pay is increasing as private sector pay has shrunk to its lowest level ever. An L.A. Times headline in May read: “Thanks to Obama spending, private sector pay is now the smallest part of personal income in U.S. history.”
In 18 months the Obama-Pelosi-Reid team has done little to promote entrepreneurship while investing heavily in government. The private sector has played a historic role in building America and leading to breakthroughs like the micro-chip, the cell phone, and the polio vaccine. But Washington’s current leadership has committed its power toward increasing taxes and redistributing wealth away from entrepreneurs, funneling billions of dollars toward bureaucracies and government employee unions.
This is in stark contrast to the Democratic governor of Montana, Brian Schweitzer, who asked Montanans to submit their ideas on how to save the state government money. When the governor was asked recently if anyone suggested raising taxes, he responded bluntly: “I don’t pay any attention to that. I don’t increase taxes. I try to decrease taxes.” Governor Schweitzer understands that private citizens should be empowered, not public employees.
Washington should remember what made America successful: the risk takers and entrepreneurs, the companies started out of basements or garages, the ideas developed and scratched out on paper napkins. American giants like Apple and FedEx were all started as small firms and grew because innovative and daring entrepreneurs dared to succeed.
The government will never be able to replace the spirit of an individual striving towards his or her dream, which is the government’s first priority in creating jobs should be empowering the private sector, not enlarging the government.
(Dan Varroney is Chief Operating Officer of American Solutions and is a contributing author with Newt Gingrich of the New York Times best seller To Save America.)