The debate about the nation’s declining economy took an interesting turn this past week as liberals have begun arguing that cuts in public sector jobs are sinking any hopes of a recovery. That was the conceit of yesterday’s front-page story in the New York Times that claimed public worker layoffs are hurting the economy. This is an assertion that seems to contradict the focus of most public policy discussions in the past two years — especially during the debt ceiling crisis in 2011 — when most Democrats and Republicans agreed that government expenditures had to be cut and only differed over how much the size of the public payroll needed to be reduced. But with the Republican presidential candidate getting some traction by speaking out on the need to continue cutting back on the size of government, some liberals are pushing back and speaking not only about the cost to the public of cuts in services but also about the role of public sector jobs in inflating the country’s economic balloon.
In a limited sense, they are right, as the wages of government employees are part of the economy and when they disappear, it creates some unemployment as well as a decline in economic activity, not to mention pain for the families involved. But laments about these job cuts should not confuse us about the role the public sector plays in expanding the economy. Genuine growth, the sort of wealth creation that makes all the boats rise, comes from the private sector jobs, not government sinecures. Moreover, if the public schools and other government services are now to be merely seen as jobs programs, then the problems of our education system go a lot deeper than budget shortfalls.