By Ezra Klein
In the graph atop this post, I ran the numbers on total government employment after the 1981, 1990, 2001 and 2008 recessions. I made government employment on the eve of the recession equal to “1,” so what you’re seeing is total change in the ensuing 54 months, which is how much time has elapsed since the start of this recession.
Since Obama was elected, the public sector has lost about 600,000 jobs. If you put those jobs back, the unemployment rate would be 7.8 percent.
But what if we did more than that? At this point in George W. BushÂ’s administration, public-sector employment had grown by 3.7 percent. That would be equal to a bit over 800,000 jobs today. If you add those hypothetical jobs, the unemployment rate falls to 7.3 percent.
Today, Ben Polak, chairman of the economics department at Yale University, and Peter K. Schott, professor of economics at the Yale School of Management, widen the lens, with similar results:
Without this hidden austerity program, the economy would look very different. If state and local governments had followed the pattern of the previous two recessions, they would have added 1.4 million to 1.9 million jobs and overall unemployment would be 7.0 to 7.3 percent instead of 8.2 percent.