EARLIER this year, President Barack Obama famously blamed the nation's economic woes on reductions in government payrolls. “The private sector is doing fine,” Obama said. “Where we're seeing weaknesses in our economy have to do with state and local government.”
That comment was rightly derided for highlighting a belief that government jobs are somehow greater economic boosters than private-sector jobs, which are the true lifeblood of the economy.
This was reinforced again by a U.S. Census Bureau survey of state government jobs. The report found Oklahoma state government has slashed the number of its full-time workers by more than 2,000 and reduced monthly payroll by $4.2 million. Yet Oklahoma's July unemployment rate was 4.9 percent, among the lowest in the nation.
If Obama's view of economic growth were correct, then Oklahoma should be in the job-creation cellar by now. It's not. In fact, even though Oklahoma's July jobless rate increased for the first time in nearly a year, the state's rate of employment growth over the past year topped 3 percent. Lynn Gray, chief economist for the Oklahoma Employment Security Commission, notes that Oklahoma hasn't experienced an annual rate of employment growth that strong since 1984.
Those statistics must bewilder Obama. Much of his focus in office has been on boosting the number of government employees and protecting their jobs rather than unleashing the private economy. A huge share of stimulus money sent to the states was to prevent state worker layoffs, yet the national unemployment rate remains above 8 percent. On the other hand, Obama's tax and regulatory policies hinder private business growth and job creation.
Oklahoma policymakers responded to the recession by right-sizing government and reducing the burden on the private sector. The results suggest that economic approach is superior to Obama's theories.