Washington DC Prospers. The Rest of the US? Well….

Recent government reports show the federal government prospering while the rest of the country struggles with today’s economic realities.  The US Commerce Department reported the only growth in 2009 net earnings and personal income in the 52 US metropolitan areas with populations over 1 million occurred in the federal workforce.  All private sector earnings and income declined.  The Federal Reserve Bank of St. Louis released a report which showed an overall loss of 12 million jobs since the peak in 2007.  When choosing the candidates who get your vote in November, ask whether they understand this coming train wreck, and what do they plan to do about it?

According to data from federal government sources (see below), there is a rather alarming picture to consider when deciding which candidates get your vote in the November election:

• 2009 private sector net earnings and personal income decreased in the largest 52 metropolitan areas.
• 2009 federal sector net earnings and personal income increased.
• The federal civilian headcount is currently on track to increase 20% from 2008 to 2010.
• Overall, 12 million jobs were lost in the recent recession and have not come back so far.

The upshot is a growing federal civilian headcount and payroll which creates a greater burden on a weakened private sector.  This will probably only get worse with the federal hiring and other spending required for health care reform, financial industry reform, and whatever other reforms Congress dreams up.  In many cases, the situation is similar at the state level. 


Make Your Vote Count

This paints a picture where the federal burden is growing; the private sector is treading water at best; and the powers that be in Washington DC seem to have run out of ideas.  This has all the hallmarks of a train wreck.  For the candidates who want your vote in the November election and want to represent you in Congress and elsewhere, find out what their role was in creating this situation and what their plans are to fix it.  A good starting point is the Project Vote Smart Web site.  If a candidate talks about more government spending, taxes, and control of the economy, it’s not a good sign, and it’s probably a good reason to vote for someone else.


US Commerce Department Net Earnings and Personal Income Report for 2009

The Bureau of Economic Analysis at the US Commerce Department released a 2009 report of net earnings and personal income on 08/09/2010.  First, some definitions.

Personal Income:  Income from all sources.
Net Earnings:  Personal income from work-related sources such as salaries and wages.

For the 52 US metropolitan areas with populations over 1 million, 49 showed a decrease in net earnings and personal income.  The 3 metropolitan areas which showed increases were Washington DC, San Antonio TX, and Virginia Beach VA.  According to the report, the increase in these metropolitan areas was due to the federal workforce, civilian and military.  Private sector net earnings and personal income decreased in these 3 areas.

On August 5, 2010, Senator Orrin Hatch (R-Utah) introduced a bill to get the federal headcount under control.  According to the senator’s Web site, the federal civilian employee headcount was 1.2 million in 2008 and is planned to increase by 20% to 1.43 million in 2010. 


Federal Reserve Bank of St. Louis Civilian-Employment Ratio Report

The Civilian-Employment Ratio Report provided by the Federal Reserve Bank of St. Louis shows the percent of the civilian US population which is employed at any particular time.  This includes both the public and private sector civilian workforce.  Once you click on the link, click “max” in Observation Quick Range, and click the Redraw graph at the bottom.  The graph should then show everything from the 1940’s to today, and the gray bars in the graph identify recessions.

The graph shows this Employment Ratio decreased by about 5% in the current recession compared to a maximum of 3% in previous recessions.  This equates to a loss of 12 million jobs relative to the peak Employment Ratio in 2007.  Since the ratio hit bottom in 12/2009, it has mostly gone sideways since.