Hillary’s Right About Jobs

Hillary Clinton’s recent exhortation “Don’t let anybody tell you that it’s corporations and businesses that create jobs,” has been drawing a lot of flack from conservatives, but it’s pretty much true these days.

Back in the olden days, of course, businesses did create jobs. But now, not so much.

Here are the number of private sector jobs added during recent presidential terms:










Of course, the number of jobs “created” (added) is only a part of the picture.

The other part is how those jobs measure up.

Public-sector jobs pay better on average than those jobs created by businesses. According to employee compensation data released by the Labor Department:

Employees in private industry received an average of $29.11 per hour in total compensation in June. That included $20.47 in salary and $8.64 in benefits. State and local government workers averaged $42.09 per hour in compensation. That included $27.16 in salary and $14.93 in benefits.

And job security is better in the public sector: it’s far harder to fire a public-sector employee, both due to a difference in applicable employment law—most private employees are employed under “at will” terms; most public-sector employees have a “right to ‘notice and a meaningful opportunity to be heard'”—and because public-sector employees are also far more likely to be unionized:

Public-sector workers had a union membership rate (35.3 percent) more than five times higher than that of private-sector workers (6.7 percent).

Even when they’re caught up in major scandals, public-sector employees are routinely allowed to “retire” rather than being fired, thus retaining their incredibly generous retirement packages, including pensions that often total more than their final salaries, and fully-paid health benefits.

Another factor to consider is that even when one is fired from a public sector job, it need not mean financial hardship. In California, three school superintendents were among the highest-paid employees in the state last year—including one taking home more than $600,000—when they were fired and received six-figure severance payments:

The data shows that both small and large public school districts awarded administrators six-figure salaries, sometimes with lifetime health benefits, low- or no-interest home loans and golden parachutes, even as California emerged from a financial crisis that forced huge cuts to social service programs for the poor and elderly.

[Californians being asked to approve higher taxes and more spending for “education” on tomorrow’s ballot might want to think about this.]

Of course, the biggest problem with the consideration of public vs. private job “creation” is that public sector employment doesn’t actually produce anything with which to pay for those jobs, and is thus wholly dependent on the productivity of the private sector.

Unfortunately, the burden of regulations like Obamacare mean that more private-sector jobs are part-time, further immiserating private-sector employees, and leaving less from which the public sector can take to support itself in the style to which it has become accustomed. And with the full brunt of the Affordable Care Act’s not taking effect until after tomorrow’s elections, this dismal picture will only likely get worse.

Meanwhile, the very worst news is that less and less of the population is actually working at all, as shown in this graph of labor force participation:











With little hope for relief from Washington’s regime uncertainty during the two years remaining until Mrs. Clinton’s presumed official run for the presidency, she may well wish that businesses and corporations did create jobs—surely it would be easier to win as alumna of an administration that presided over better times.

Mary L. G. Theroux is Senior Vice President of the Independent Institute. Having received her A.B. in economics from Stanford University, she is Managing Director of Lightning Ventures, L.P., a San Francisco Bay Area investment firm, former Chairman of the Board of Advisors for the Salvation Army of both San Francisco and Alameda County, and Vice President of the C.S. Lewis Society of California.
Full Biography
Beacon Posts by Mary Theroux
  • Catalyst
  • MyGovCost.org
  • FDAReview.org
  • OnPower.org
  • elindependent.org