Private Sector Paying the Price for Public Employee Increases

Right From the Start

Give a Liberal a fish and you feed him for a day. Teach a liberal to fish and he’ll be back for more of those free fish tomorrow.

  –  Anonymous

Oregon’s private sector employees are paying the price for Oregon’s growth in government and public employee unions, particularly under the administration of Gov. Ted Kulongoski (D). I have previously described the staggering loss of over 150,000 private sector jobs from December of 2007 to December of 2009 while the number of state government employees increased by nearly 4,300 during the same period of time.

But a closer look at the employment statistics published by the United States Bureau of Labor Statistics paints an even more startling picture.

For the last sixteen years (the period covering the administrations of Gov. Kitzhaber and Gov. Kulongoski), Oregon’s available workforce has grown at an average rate of about 1.3 percent. The available workforce includes not only those working but also those eligible for employment. During that same period of time, Oregon’s employment has grown at an average rate of 0.9 percent. The result is a steady upward trend in unemployment over sixteen years. Under Kulongoski, even though the growth in the available workforce slowed to about 0.9 percent, job growth dropped to 0.6 percent.

But it is where the job growth (loss) occurred during that period of time that tells the tale. The best paying jobs in the private sector experienced the greatest damage. Over that period of time while workforce availability increased at an average rate of 1.3 percent, Construction increased only an anemic 0.2 percent. Manufacturing actually lost 43,000 jobs for an annual decline of –0.14 percent. Trades and Transportation grew at only 0.5 percent and Mining & Logging declined by an average of -2.2 percent per year.

But worry not, while growth in private sector employment failed to keep pace with workforce availability, Government employment grew at an annual rate of 1.24 percent. During the same period of time the state grew its biennial budget at an average double-digit rate. Most of that growth was used to pay for increased number of employees, twice annual salary increases, increases for a gold-plated healthcare insurance plan and increases for funding Oregon’s outrageous Public Employees Retirements System. (Just a reminder, state public employees pay nothing for their healthcare insurance and contribute nothing for their pension plan.)

And each biennium state government raises either taxes or fees to fund these excesses. The largest of these was the combination of Measures 66 and 67 which drained another $735 Million out of Oregon’s economy at a time when new investment was dearly needed to stimulate job growth.

And that is the point precisely. Every additional dollar extracted by government to fund the generous salaries of a bloated workforce, to enhance healthcare insurance (that most Oregonians cannot afford), and to fund a pension plan (that allows some public employees to retire with benefits in excess of their last salaries while working), is a dollar denied to the private sector economy to start businesses, secure businesses, and grow businesses – all of which are the only way to increase private sector employment.

The employment statistical nightmare that is Oregon is demonstrative of this fact. Oregon continues to extract a higher and higher percentage of payments from business to government and thus deplete funds available for preservation and growth. The net effect, as demonstrated by the employment reports, is that job growth in Oregon fails to keep pace with the growth in total workforce available. The best paying jobs migrate elsewhere as evidenced by the decline in Manufacturing and Mining & Logging, and the anemic growth in Construction and Trades and Transportation.

The total growth in government spending fueled by the outrageous demands of public employee unions outpaces the growth in Oregon’s total private sector income. Twenty four years of Democrat administrations, bought and paid for the deep pockets of Oregon’s public employees unions has enabled this calamity.

And here is the bitter irony. Unions were created to give a collective voice to those who individually had none. Today, Oregon’s public employees unions are the government through the Democrat Party and they ignore the taxpayers who individually have no voice. It is a particularly cruel irony when you realize that 150,000 of those individuals were those that lost their jobs while government grew and another 45,000 to 50,000 who could not find work when they entered the workforce – these are the working men and women who unions originally sought to protect and who now are victimized by the avarice of Oregon’s public employee unions.