The figure above shows data on employment in the US economy 1948 to 2011 across 10 sectors. The data comes from the Bureau of Economic Analysis. There is a discontinuity in the data in 1998, when category definitions were changed. and we have not tried to standardize across that discontinuity. In addition, the graph shows "full time equivalents" rather than the frequently used full- and part-time employment series.

Some numbers:
  • In 1948 the US had 48.0 million FTE jobs.
  • In 2011 the US had  122.6 million FTE jobs.
  • From 1948 to 2011 the US added 74.6 million FTE jobs, an increase of about 1.5% per year.  (It was 1.3% from 1970 to 2011).
The figure below shows how the overall rate of job growth has changed over time. It shows the trailing 10-year annual growth rates in FTE jobs.

The data clearly show the effects of the Vietnam War in the 1960s (i.e., from 1964-1968 government FTE jobs increased annually: 2.9%, 3.2%, 79.%, 5.4%, 3.2%). The data also show a spectacular slowdown in job growth from 2001-2011. In fact, the US had 1.1 million less FTE jobs in 2011 than it did in 2001. The data shows that over the past decade there is more going on in job stagnation than the effects of the financial crisis post-2007

The graph below shows the same data in percentage terms.
Some numbers:

  • In 2011 government accounted for a smaller percentage of jobs (16.5%) than it did in 1951 (17.6%).
  • Manufacturing was 31.1% of all jobs in 1950; it was 9.4% of all jobs in 2011.
  • Agriculture was 4.3% of all jobs in 1950; it was 0.9% in 2011.
  • In 1950 finance and services were 16.7% of all jobs; in 2011 they were 49.7%.

Behind these numbers are some interesting dynamics. While manufacturing has shrunk dramatically as a proportion of all jobs, since 1950 the US has only seen a decrease of 3.7 million manufacturing jobs. Over that same period the US has added 47.1 million service jobs. Government has remained remarkably stable as a proportion of jobs, but has added 13.8 million jobs since 1950, but most of those were added before 1970.

Here is an interesting thought experiment:

Consider that from 1970 to 2001 jobs in the overall economy grew by 1.8% per year. In government they grew at half that rate. From 2001 to 2011 government jobs grew at 0.4% per year -- less than half the rate of the previous three decades.

  • If government jobs had grown 2001-2011 at the same rate as government job growth 1970-2001, then the US would presently have 1 million more jobs.  The current unemployment rate would be 6.4% rather than 7.0%.
  • If government jobs had grown 2001-2011 at the same rate as overall growth of jobs in the US economy 1970-2001, then the US would presently have 3.03 million more jobs. The current unemployment rate would be 5.1%.

What could the US government do with 3 million more employees?  Oh, I'm sure we could think of something.