From The Hill:

Democrats are set to unveil a new jobs initiative Wednesday that will provide grants to local governments to save or create jobs.

House Education and Labor Committee Chairman George Miller (D-Calif.) will join other lawmakers and mayors to announce a $100 billion program to support jobs initiatives in local governments and municipalities.

“Our goal is to retain or create a million jobs,” Miller said during an appearance on CNBC Wednesday morning. “There’s some very serious concern that the small, good news we’re getting right now on the unemployment figures could be wiped out by what’s going to happen in local governments, if they don’t get some assistance.”
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Last week, the Huffington Post (here) was all over this  new study showing that low-income workers got hit more severely during the recession than high-income workers (low-income workers suffer an over 30 percent unemployment rate, workers making about $138,000, only a 3.2 percent.)

The data in this study, which turned out to be quite misleading, certainly makes for nice populist headlines. But it is hiding the true debate that we should be having. And that’s not that low-skill workers are vulnerable to recession (duh) but that public-sector employees still have jobs and private employees don’t.

Look at the data:

In this chart, I compare seasonally adjusted unemployment rates across segments of the economy, dividing these segments using the super-categories designated by the Bureau of Labor Statistics. The chart compares the unemployment rates in January of 2009 (blue) with the unemployment rates in these same sectors a year later (yellow). (FYI, the difference would be even more dramatic if I had used not seasonally adjusted data)

In both years, the unemployment rate within the government has been small relative to the level of unemployment within the entire economy, and particularly so relative to the private sector.   In the course of a year, government employment has decreased by 296,000 jobs to 4.3% unemployment; during the same period, employment in the private, non-agricultural, sector has decreased by 2.3 million jobs to 11.1%. (And if you look at not seasonally adjusted unemployment data, the lose of private jobs reached 3.1 million and the lose of public jobs is roughly 70,000. That’s quite a gap.)

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Undeterred by stubbornly high unemployment rates, and a stimulus plan that has fallen flat, talk of a second stimulus package is growing louder.  But to shed the unsuccessful “stimulus” moniker, Democrats and government labor unions have adopted a “jobs plan.”

Paul Krugman, the New York Times columnist who’s never seen a government expenditure he didn’t like, Sunday  pointed to a “study” by the Economic Policy Institute, which alleges spending $40 billion over 3 years could create about a million “public-service” jobs.

In other words, Krugman and EPI would see fit to simply create government jobs, instead of trying to help the private sector.  That makes sense, given who supports EPI.

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