« Government Workers and Fiscal Problems-Becker | Main | Notice »



Feed You can follow this conversation by subscribing to the comment feed for this post.


Oh, good heavens, let me confess that Jack, NEH, and an observer have a point -- so far as it goes, which is not that far.

Evidently, like all Marxists, they believe there is an oppressed proletariat that could, if unleashed, flower into the rulers of a utopian State. The experience of the 20th century decisively disproves that fantasy.

Proudly and happily, I did my years as a prole. Eventually I lifted myself above busting my knuckles to earn my daily bread, much like my forefathers who settled America over 350 years ago hoped their descendants would.

Jack, NEH, and an observer take another view. Energy and creativity should be punished by stripping away the fruits of such endeavor for the benefit of the lazy -- or those who would raise themselves above their fellow men for reasons that are shallow and unfounded. They would "free" the proletariat only to enslave them in dismal gulags.

Bah. Gimme a break.

an observer

Tanstaafl: Since you are neither rich nor powerful, what madness, and it is madness, compels you to defend people who would never defend or offer their help to you in any way.


tanstaffl, Only 350 years ago? My, you are newcomer. Some of my forebears were fighting for and expanding the boundaries of the "colonies" or trade groups long before there was even the seed of an idea of an America. We fought for, helped expand and sometimes died for that seed. All from such disparate places such as Mass., Pa., De., and Va.. So don't even begin to assume that your "paternity" grants any rights or "special insights" into economic ordering. Perhaps you ought to take the time to become familiar with the Ordinance of the Northwest Territory. Which we carried into that Territory and made reality by basing various State Constitutions through out the Midwest and West.

As for our supposed "Marxian" bent. You're beginning to sound an awful lot like old "Uncle Joe" McCarthy. Who temporarily rode to power and influence by classifying everyone and everything as a "Commie". After the alcohol got the better of him, he started finding them hiding under his bed at night. "Have you no shame"? To broaden your economic understanding, perhaps you ought to become familiar with "Das Kapital". A rather important work in Political Economics. Then and now.

Bootstrapped yourself out of a "bad" job-eh? Well, congratulations and welcome to the Club... But don't begin to presume that it grants any special rights or privileges... ;)

rational expectations

Is slavery "economic liberty"? - No

Is having to work at slave wages economic liberty? - No, but choosing to is. At least in America we choose to work. The term "slave wages" is an oxymoron. My understanding is that slaves do not earn wages.


Rational Expectations: Using GDP as a measurement in the private sector has the same problems; ie an OJ Simpson trial of 10's of millions being far more "productive" than that of a cheap (railroading?) of a penniless defendant with very limited public defender funding.

And, of course the "financial sector" that a few decades ago was a very small function, being today a major function and garnering 30% of all the profits "earned?" in the US while being corrupted top to bottom and by any decent measurement being a monstrous negative during the years of the false housing boom, junque bonds and directing scarce resources wastefully.

There have been some experiments in measuring "living std values" but that's tough going as well. For example what actual worth is there being no line or wait at the PO or DMV? Or, while lawyering is a MAJOR component of US GDP...... in Japan there are very few lawsuits; is our std of living enhanced by all the litigation here?

H/C here is 17% of one of the highest GDP's per capita in the US, but were it the 10% or less of the EU, Canada and others and GDP consequently 7% smaller, surely our std of living would not be seven percent worse.

Many suggest that the "market clearing" of the private sector is some very efficient process that makes few mistakes. It seems to work best in large markets of lots of true "supply/demand/price" transactions, say running shoes and fast food? But then the "vicious" competition means the shoes WILL be mfg in some slave wage venue, and that those working in fast food will NOT earn a living wage and will be subsidized both by government programs, and by not having the income to participate in paying "their share" of government and public services.

In agriculture, everywhere in the world, the few, better organized buyers, beat down the prices asked by many unorganized sellers below the costs of production. That's why we and every nation had farm price support programs when I was a kid, have the same today, and likely will have them when our kids retire.

In the bigger chunks? Housing was "cleared" for a decade or more at median and average prices well beyond what median and average wages could sustain. The gap is in the trillions.

And wages? In the public sector there are few salaries above $200,000 with Gates recently quipping that his young daughter earns more managing a five person staff than he does managing the largest and most complex organization on earth. Then there are managers of the insurance parasite industry "earning?" $10 million plus in an industry that has "invented" nothing, solved no problems, and hardly can claim any increases in efficiency and arguably are a major road block to computerization of medical information.


Hilarious! Per capita income comparison of countries with populations ranging from 4 million to 305 million *without* taking into consideration: population dynamics, natural resources, comparative advantages, economic freedom, and duration of economic freedom. And to all this one would have to fit in the effect of the public sector.

Posner writes: "Therefore one might think that the larger the fraction of public employees in a nation’s workforce, the less efficient the nation’s economy, and so the lower per capita GDP would be."

Not unless you subscribe to a simplistic world view in which the impact of the public sector is the only variable which affects per capita income. A country like Norway, which has rich oil deposits in the North Sea, making it the Saudi Arabia of Scandinavia, can generate income from its natural resources which will more than offset any reductions in per capita income by the racket that is the public sector. A country like Sweden, which had free markets and (almost) free trade for most of the 19th century and even into the 20th century, but later socialized during the 70s, would obviously have a higher per capita income than a country which only had free markets for half-a-century.

Here's a counterexample:

Manhattan (comparable in size to Norway than the entire USA) has a per capita income of more than twice that of Norway. I invite you to compare their public sectors.

You fail to even consider other variables which have been clearly demonstrated to affect per capita income. Do you do this in your research papers also?


Tans: I'd like to respond to your, seeming, lament but whatever it is, is so covered up by the buzzwords so over-used today on Whackright Radio that can't quite make out the nature of your complaint.

If it IS about the upward mobility of which the US was a front runner in the last generation but has lost that position to a number of other nations today, I share your concern and would hope to restore such opportunity to the young, who coming out of college are enjoying a 12 unemployment rate while those not among the 25% we manage to graduate (while giving lip service the the "new economy" requiring 50% or more) are facing unemployment rates upwards of 25% and MUCH higher if "overly pigmented".

Cheers, though and how is Rushie doing with his "problem?"


@ Jack

Someone has a message for you: http://www.youtube.com/watch?v=3DY9nVETzIY


What we discuss here is often the symptom not the cause. Check out this Canadian professor at the site below. Maybe he is on to something.



Leftists never acknowledge their viewpoint rests on a lust for coercive wealth redistribution -- always, of course, to themselves from productive members of society -- let alone try to justify that position. Rather, they hurl epithets like "Whackright Radio" at anyone who calls them out.

Is there a 12-step program for leftists? There ought to be.


Most folks don't know that Saul Alinsky was taught community organizing by Frank Nitti, Capone's number 2 guy. The key element is to marginalized your opponent by isolation and ridicule. Of course there are other methods as well but some of them might be illegal.


Jim, Such are the dangers of "Democracy" and "Free Speech" run amuck. As Justice Holmes once put it, "Although we have "Freedom of Speech" it doesn't grant us the right to yell "FIRE!" in crowded theater". Ahh... the joys of Mobocracy and the lack of civility, restraint and common sense. As we say in Chicago, "If you're going to a knife fight - make sure you bring a gun"... ;)



Ah, a fellow Chicagoan. We know how it works. Don't make no waves, don't back no losers (except, of course, the Cubs).


Jim, Ahh.. the Cubs. What I like about Cubs fans is you can always get them to bet on the team; even when the Cubs are down by ten in the bottom of the Ninth. ;) I'm a "Southsider", Go Sox... ;)


Rational Re "slave wages" Well, you'd be wrong as slaves "earned" food, housing, clothing along with what medical care was available and "worth" protecting the owner's investment. Today? with productivity and overall wealth many times higher, we see all too many in the US working long hours and yet not deriving a living wage. And, of course in purely economic terms, as the employer does not have an investment to protect, and we've LONG run our economy such that their has been surplus labor, the employer knows there is another one to plug in if the current low wage earner becomes ill or drops in his tracks.

Tans? "Leftist "REDISTRIBUTION?" Well ONE of the guys of the, quite centrist, Democratic Party did hope for a "rising tide the lifted all of the boats".... but! either "leftists" were very poor at hanging on to their traditional share of the pie, or Reagan and others of similar ilk were very, very good at snatching it away.

In light of the data......... doesn't it seem a bit silly for a rightwinger to bring up the issue of wealth distribution? and ALL FOR THE RICH tax policies?


Jeremy Scott

Let me very be frank with you. There are over thousands of bloggers in Malaysia. Not all of them win our hearts and respects. Very few of them including you and RPK are my favourites. Like others I have my reason for liking you guys.You have your opinion. Most of your opinions or articles are mild, probably because that’s how you were trained during your days with MSMs, being very cautious.In RPK’s case it is different. He speaks the mind of his readers with information and evidence he obtains from the various sources who trust him more than themselves. He gives them his word that he would never reveal unless they want him to do so. His readers are the ordinary Malaysians who find life not easy and in some ways believe this government is responsible for it.We must understand. Being a person in his status, it was not necessary for one to risk his comfort and luxury in life. What is he going to benefit personally out this battles? One must not forget, he is talking against the government and its leaders who will not have second thoughts to “finish” your good life if you are a threat to them. Remember what had landed a powerful DPM at one time into and what he is going through.Unlike in some other countries, Malaysia is in full control by one party that is led by few powerful Malays. They have the money, power and most importantly positions. People who are privy to their secrets are often afraid to reveal the truths for fear of being victimized. While some are silenced while others come out, responding to the conscience and in doing so they need people like RPK to confide in. Therefore, RPK cannot turn betrayer who point finger at them just to save himself.I sincerely believe he is one of the few Malaysians who are prepared to bid his own life for the sake of country and the people of Malaysia. He is actually a hero.The only fear I have is, his Deep Throats try to fix or trap him with untruthful stories that could jeopardize his credibility.

Mike Liveright

Perhaps interesting, but...

I do wish that there were clear links to the data, an X-Y chart of the data, and the sources, so that we could do our own analysis and perhaps do other cuts at it.

The other factor that I would like to know about is what is the level of both Direct and Indirect Government spending and employes? I realize that this may be less accurate, but it seems to me that the real size of the government employment is not only those who are directly getting the Government pay check, but those that have been outsourced to Government controlled pseudo private contractors. I suspect that if we included those into the US system we would find that our Public and Pseudo employment is much higher and that due to the recent pressure to replace Public by Pseudo employees, we are ranked "higher" than just the Public Employes indicates.


I realize this is an old blog post, but one crucial factor you omitted is the relative workforce particpation rates in these countries. The effect of a higher percentage of workforce made up of public employees may be magnified where the overall workforce rate is low (e.g. Greece, Spain, Portugal where it is below 45%). Because the private sector must produce enough to support the nation as a whole (whether employed or not), where the overall workforce participation rate is low, the burden of paying for the overhead of the public workforce is greater. The US workforce participation rate is 63.6% this week. In Greece it's about 43%. Assuming both had the same government workforce percentage, the burden on the private sector would be much greater in Greece(once we subtract the 22.3% from the 43% - the private sector in greece accounts for less than 1/3 of the working age population). To put it another way, the government must get more revenue out of the private sector to support both the public sector and the non-participating population when the private sector is smaller.


If workforce particpation was 100%, having 20% of the workforce in the public sector would likely not be overly burdensome on economic growth.


Where's the data and could you provide references for the data?



Percentage of public workers in a nation’s workforce of course would not be significantly significantly corrected to per capita GDP at any certain point of time, because per capita GDP depends on the country's all aspects of history. For example, country A's and B's per capita GDP are n and 3n respectively in year Y and 2n and 3.5n in year Y + 10; country A's significantly much faster growth may be due to its much lower proportion of public workers. Thus, I agree with Mitchell K's view "A comparison of percentage growth in per capital GDP versus changes in the proportion of government workers across different countries and over long periods of time might be more illuminating. Such an analysis uses changes in relative wealth as a proxy for economic efficiency rather than absolute wealth."

Besides, the public workforce in north European countries and other European countries in economic recession are by far different. North European countries have position-based civil service systems, while civil servant jobs in most other other countries are mostly career-based. Also, the public-private wage differential is about zero among north European countries, while the number in south European countries including Greece, Spain, Italy, Portugal is the highest across Europe.

In my intuitive view, public-private wage gap is significantly negatively correlated to a country's economic efficiency, competence, and prospect. For example, I searched the Internet and found "Among more recent studies focussing on European countries, Portugal - Centeno (2001) use the 1995 wave of the European Community Household Panel (ECHP) to compare wage differentials between the general government and the private sector in the European Union member states. Considering identical worker's characteristics, they nd that the wage gap is wider in Portugal, Ireland, Luxembourg, Spain and Italy; it is narrower in Austria, Belgium, Germany; in Denmark the differential turns out slightly negative." in "The public-private pay gap: a robust quantile approach." And the gap in Greece is the hugest in these ten years. In stark contrast to robust economies in Germany, Denmark and other north European countries, Greece, Portugal, Ireland, Spain and Italy has the highest debts and unemployment rates in Europe. In addition, in eastern Asia, public-private wage differential also significantly correlates to economic competence. In these ten years, Taiwan > Hong Kong > South Korea > Singapore in terms of public-private income gap, and the economic performance is Singapore > South Korea > Hong Kong > Taiwan. The negative correlation between public-private wage gap and economic performance seems very significant.


Hah, the bottom line is that payments to public sector employees, is just another transfer payment/redistribution of income, no different than welfare, SNAP, WIC, ect., it comes under the guise of wages, but that "wage" is paid by taxing private individuals and businesses. The only other source for paying public sector employees would be by printing currency, or as Mr. Bernake does, by quantitative easement. A simple trip down "reality bite" road will suffice: (1) the Department of Energy produces no energy, ConEd, Texaco, Duke Electric, does; (1) the Department of Health, produces no health services, physician, nurses and hospital does; (3) the Department of Agriculture produces no crops, farmers do, etc. The relationship between public sector employees and private sector is one of parasite/host, with public sector employees being the former. Sorry guys, bur real is real.


Admittedly this is a very crude analysis, can it be expanded to also factor how much these countries are paying their public service in greater detail? After all I am not sure Sweden pays their public service like Canada pays their public sector I also believe they work more efficiently then the Canadian pubic service do. How many of these countries allow their public sector to unionize and have deals with the public sector where they are work minimal hours with over and above international market income? Take these factors into greater detail and then you will have a blog worth reading.

The comments to this entry are closed.

Become a Fan

May 2014

Sun Mon Tue Wed Thu Fri Sat
        1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30 31