How many Americans work in government? That’s a more difficult question to answer than you would think. Officially, as of 2009, the federal government employed 2.8 million individuals out of a total U.S. workforce of 236 million, or just over one percent of the workforce.
But that isn’t the entire picture. Add in uniformed military personnel, and the figure goes up to just under 4.4 million. There are also 66,000 people who work in the legislative branch and for federal courts. That makes the total figure about 2 percent of the workforce.
Even that doesn’t tell the full story. A lot of government work is done by contractors — from arms manufacturers to local charities, from environmental advocacy groups to university researchers. Much of the work these companies and individuals perform is funded by taxpayers. They should count as part of the federal government workforce as well.
Unfortunately, we can’t ask the Office of Personnel Management (OPM) how many government contractors and grantees there are. They don’t keep such records.
However, Professor Paul Light, of New York University, has estimated the size of these shadowy branches of government. As he points out, while there are many good reasons for the government to use contractors. But, the use of contracts and grants also hides the true size of government:
[The federal government] uses contracts, grants, and mandates to state and local governments to hide its true size, thereby creating the illusion that it is smaller than it actually is, and give its departments and agencies much greater flexibility in hiring labor, thereby creating the illusion that the civil-service system is somehow working effectively.
OPM’s failure to keep records of the number of quasi-governmental employees indicates a lack of accountability, as Professor Light says:
Contractors and grantees do not keep count of their employees, in part because doing so would allow the federal government . . . to estimate actual labor costs.
Nevertheless, Professor Light was able to come up with some useful estimates by using the federal government’s procurement database. When he added up all the numbers, he found that the true size of the federal government was about 11 million: 1.8 million civil servants, 870,000 postal workers, 1.4 million military personnel, 4.4 million contractors, and 2.5 million grantees.
Yet the federal government isn’t all. Despite its huge budgets, state and local governments dwarf Washington in direct employment. According to the U.S. Census Bureau, there are 3.8 million full-time and 1.5 million part-time employees on state payrolls. Local governments add a further 11 million full-time and 3.2 million part-time personnel. This means that state and local governments combined employ 19.5 million Americans.
When we add up the true size of the federal workforce — civil servants, postal workers, military personnel, contractors, grantees, and bailed-out businesses — and add in state- and local-government employees — civil servants, teachers, firefighters, and police officers — we reach the astonishing figure of nearly 40 million Americans employed in some way by government. That means that about 17 percent of the American labor pool — one in every six workers — owes its living to the taxpayer.
What does this mean for the future of our nation?
There is going to be a government default at some point. Tens of millions of these people will lose their jobs. The private sector will have to absorb them.
Consider the Great Depression, when government was a small percentage of the labor market. There was 25 percent unemployment in 1933.
Think of what will happen in the Great Default. There will be a surge in unemployment, but then these people will at long last be forced to become productive. There will be an increase in national productivity. These people will suffer sharp declines in their income. But taxes will fall for the rest of us.
It will be the turning point for America’s decline. This nation will rebound. No nation is better positioned for economic growth as a result of bankrupt governments. But the pain will be excruciating for the people who are on government payrolls today. As for government pensions, forget about it. Gone. As for government labor unions: also gone.
This article originally appeared in the National Review.