The Government is Still Getting Bigger

The good news is that the federal government workforce is getting smaller, but state and local governments are more than compensating for it. While the federal workforce shrank by 7,000, state workforces ballooned by 47,000 as part of a 73,000 increase in the government sector.

The situation is so bad that government jobs accounted for half the jobs in June. Private sector jobs came in only slightly ahead at 74,000. And the term “private sector” is misleading. 39,000 of those jobs came from the health care sector, much of . is government subsidized, and 19,000 came out of the welfare sector which is almost entirely government funded.

June had very little private sector job growth and a whole lot of government job growth.

Ever since the advent of DOGE and efforts to shed the massive amount of federal government jobs by the Trump administration, state governments began eagerly hiring the ex-feds. New York’s Gov. Hochul put up a website to specifically recruit former government bureaucrats. The state website currently advertises over 1,000 open jobs. Other blue states quickly followed suit.

Where is the money coming from? New York State’s latest budget passed $250 billion. That’s up from a $142 billion budget a decade ago. California’s $321 billion budget is up from $219 billion in 2019 and from $98 billion in 2011. How does a state budget more than triple in 14 years? Massive government growth and equally massive government corruption.

California’s GDP didn’t triple, but government growth routinely outpaces private sector growth.

Why are state governments on a hiring spree? Government employees are a valued political demographic, donating money to elected officials and voting reliably Democrat. Being fired by one arm of the government just means that they will be welcomed in by another branch of it.

Also the parts of the government that are growing fastest are health care and education. Much of that growth is driven by administrative bloat and union demands.  But these two areas are also seen positively by the public, leaving Democrats free to find new ways to expand them.

Even cities where the population of school-age children is on the decline, continue to expand their educational workforce. State community colleges, especially in California, are full of ‘ghost students’ who don’t actually exist, bots often run from abroad, who require more funding.

Worse outcomes in education and health care only ensure more money is thrown at the problem and more jobs are created. That’s why much of the actual job growth in government jobs over June was in the education sector. And why health care now dominates job creation in most states. The Trump administration has cut some federal jobs, but growth in health care and education easily outpaces even DOGE’s wildest ambition.

Chicago’s horrendously broken public school system fell from over 400,000 students in 2010 to 323,000 today, but in that same period of time, the number of teachers only declined from around 27,000 to 23,000. The school budget rose from $5.3 billion to around $8.5 billion. The average teacher salary also rose from $68,679 to $86,439 today and then to $114,429 under the new contract. That would nearly double the salaries they were receiving in 2010.

Since Chicago’s teachers’ union also controls the mayor’s office and much of the local political system, numbers like these are the only possible outcome in a system run by unions for their own benefit. The government long ago ceased to be run for the benefit of anyone except government employees.

Even as the number of students fall, the number of teachers only slightly declines and their salaries skyrocket. And this is also happening in the health care sector. Add on the massive administrative bloat and regulatory costs, and all the positions specifically created to deal with the regulatory side of things, and you can see why the growth persists.

The Federal government has a role to play in shrinking local governments and the Big Beautiful Bill may help roll back some of the growth, especially in health care, and in education, by opening the door to private school vouchers, but the system will not give way easily.

And yet that same system of perpetual government employment may end up being its own undoing. California, New York, Illinois and other big government states are looking at massive unfunded pension liabilities. Giving government unions everything they want comes with a high cost down the road. Cities like Detroit and Chicago are struggling with impossible unfunded pension debt to the same union members who have taken over the political system.

That cost of government may be borne in the short term, but not the long term.

The speed at which government gets bigger is also the rate at which it ensures its own demise. There’s hardly a major blue state or city that isn’t looking at a financial crackup or tough budgets now. The more the federal government cuts, nationally and locally, now the less the damage there will be down the road.

There’s a race on now between the rate at which government will self-destruct or be saved.