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Tax Burden: 40 Million Government Workers

Written by Gary North on April 6, 2012

How many people work for governments in the United States. Let’s look at the numbers.

The usual estimate of the number of employees of the U.S. government is 2.8 million. The estimate is fake. This does not count military personnel. But most important, it does not count contract workers paid by the federal government.

The Office of Personnel Management does not keep track of these workers. That would give the game away.

One man has estimated the total: Prof. Paul Light of New York University.

[The federal government] uses contracts, grants, and mandates to state and local governments to hide its true size, thereby creating the illusion that it is smaller than it actually is, and give its departments and agencies much greater flexibility in hiring labor, thereby creating the illusion that the civil-service system is somehow working effectively. . . .

Contractors and grantees do not keep count of their employees, in part because doing so would allow the federal government . . . to estimate actual labor costs.

Here is his estimate: 11 million, broken down as follows: 1.8 million civil servants, 870,000 postal workers, 1.4 million military personnel, 4.4 million contractors, and 2.5 million grantees. These figures are from 2006.

Yet the federal government isn’t all. Despite its huge budgets, state and local governments dwarf Washington in direct employment. According to the U.S. Census Bureau, there are 3.8 million full-time and 1.5 million part-time employees on state payrolls. Local governments add a further 11 million full-time and 3.2 million part-time personnel. This means that state and local governments combined employ 19.5 million Americans.

When we add up the true size of the federal workforce — civil servants, postal workers, military personnel, contractors, grantees, and bailed-out businesses — and add in state- and local-government employees — civil servants, teachers, firefighters, and police officers — we reach the astonishing figure of nearly 40 million Americans employed in some way by government. That means that about 17 percent of the American labor pool — one in every six workers — owes its living to the taxpayer.

There is going to be a government default at some point. Tens of millions of these people will lose their jobs. The private sector will have to absorb them.

Think of the Great Depression, when government was a small percentage of the labor market. There was 25% unemployment in 1933.

Think of what will happen in the Great Default. There will be a spurt in unemployment, but then these people will at long last be forced to become productive. There will be an increase in national productivity. These people will suffer sharp declines in their income. But taxes will fall for the rest of us.

It will be the turning point for America’s comparative decline. This nation will rebound. No nation is better positioned for economic growth as a result of bankrupt governments. But the pain will be excruciating for the people who are on government payrolls today. As for government pensions, forget about it. Gone. As for government labor unions: also gone.

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35 thoughts on “Tax Burden: 40 Million Government Workers

  1. John Stewart says:

    But according to J.E.R.K Obama, we need to give away more government money to any other person who says help or I need money. It doesn't matter whether they are citizens or not. GIVE ME A BREAK!

  2. "But taxes will fall for the rest of us." I fail to see how this will happen. So you're saying that fed, state, & local Gov'ts will say, "Oh since we just laid off all of these employees, our expenses are less, so we will lower our tax rates because we don't need as much money." I DON'T THINK SO!

  3. bullnick says:

    What people don't realize is the large number of contractors are on the payroll because the Military wanted to reduce the Force numbers. Typically, one contract technician can do the technical work of three or more military technicians. Kind of like taking from Peter to pay Paul. The bean counters say this is cheaper than doing this with a military contingent. Sometimes the contract requirements make it necessary to displace personnel to get the job done. This may not always look cheaper but it works. If the Gov. can come up with a better way to get it done, well then get after it. Until then, someone has to deal with the task at hand. Remember, this contingent pays alot of taxes. So, how much of a burden are they?

  4. Gary, "As for government pensions… gone!" Are you talkin' about my Navy retainer pay from 24 years service?? Scrap the military and hire civilian "technicians" lke Blackwater. Might be a tad expensive. But, hey, no pensions. Thats capitalism at work. The C in C just might like that. A civilian military. Might be an oxymoron. Cliff

  5. I have been saying all along the fight is not between repubs and dems, those are just names for fundraising operations, but between the private sector and the public sector. The public sector will loose and they should. When they see they will not get their pensions, a % will riot. The riots will be put down by armen citizens this time. That will settle it once and for all. The dem party will be defunded and no more.

  6. MontanaMEL says:

    I can remember when they started hiring civilians for our messhall's at Ft. Bennning, GA::: NO MORE KP!
    Remember, back then…we had the DRAFT too… it was know as the "Hurry up and wait" ARMY… Had to keep all those hands busy doing something, or they would figure out a way to get their leaders' in trouble…. This was all cira 1966.

    We all know that these "positions" have become BLOT and SURPLUS….i.e., Pencil pusher's deluxe…
    What part of FEATHER BEDDING DON'T YOU GET???… WHAT PART OF SEIU don't you understand???

    I agree…when the cruch comes from the EU and hit's us…the FED's practice of "inflate the dollar" will also crash…
    Hope everyone has a wheelborrow full of $100's for their Starbuck's Latte'…
    Become seff sufficient in your food and water supplies…an stock lots of ammo or componets… SHTF is coming!

  7. I work in a local 7-eleven. I would like to share with you about the outrageous scam the federal government is playing on the taxpayers. On a daily basis I do transactions for customers with food stamp card and everytime I do a transaction I see the balances on these cards. This will shock most people. And may I point out that these people are not coming in to buy the necessary foods that you would think a poor family would buy. They are buying junk food, candy bars, potato chips, soft drinks, energy drinks…you should be getting it by now. Most of the balances I see range from $600.00 to $2,000 on these food stamp cards. Last night I took a customer who bought $40.00 worth of junk food and was bragging about the fact that him and his family where going on vacation. His balance was just under $2,000! Obama is trying his hardest to bring this country to it's knees and if this keeps up, he will succeed. I would like to blow the whistle on this but I'm not sure who I can contact or if it would be dangerous for me. It is almost impossible for me to bite my tongue and keep my opinions to myself because I could lose my job.

  8. they pay taxes with tax money

  9. bullnick says:

    That's how the Gov rolls, look at it as if the Gov was getting a 25 to 33% discount on the labor.

  10. http://www.trunews.com with Rick Wiles.

  11. Article doesn't say for sure, but do "contractors' include all the Aircraft, aerospace, and other workers employed by "private" companies that are almost totally dependent on gummint sales to keep afloat. And how about the gummint "retirees", including former politweasels and bureaurats, that are collecting "pensions and medical coverage" that exceed anything actively working earners are making. 870,000 postal workers? How many retired postal workers with their automatic benefit raises? 2 or 3 times that number? The % is probably closer to 25%.

  12. LiveFreeOrDie says:

    Turn out the lights, the party's over….." Sorry but the consequences of these foolish decisions combined with pure greed will surely destroy our society. How long will it be? If BHO gets re-elected then its 4 years. If he is defeated (pray to God) then maybe 10 or so before it gets crazy!

  13. David R.(Canada) says:

    Add to those numbers the number of retired civil "servants" and what is the total?

  14. Private companies did not get us out of the Great Depression. It was the Government that provided jobs, food shelter and food. IF we have the great default, it will be the government workers who bring the country back from the brink of chaos – think police, military, hospitals, food stores and energy production- all energy travels on government operated power grids. It will be a time to expand the government not shrink it.
    Government workers ARE taxpayers too. It is this "them" versus "us" mentality that poisons the dialog. Government workers are you and I.

  15. The truth is that a majority of the people accept taxes and big government. There is a correlation there and once the (government provided) benefits part of that equation is gone then taxes will fall. At the moment big government people can say that government provides all sorts of wonderful things and that you can't cut taxes without cutting those things. Once those things are automatically cut after the Great Default then big government people are intellectually and practically in the water.

    This is why I hope Obama wins. If Romney or somebody similar wins then free markets might get the some of the blame when the Great Default is here which inevitably will happen.

  16. Gov't workers are "you and I"? You mean the gov't inspectors who let BP employees fill out their own report cards while accepting bribes & sex for ignoring all the safety violations at the Deepwater Horizon rig, then it exploded, sank and turned the Gulf into a wasteland? The gov't regulators who were supposed to be watching the financial services industry while it pulled off the biggest fraud and embezzlement of all time against investors, then the SEC destroyed all the evidence? Perverts at the TSA running theft rings, molesting travelers and killing the tourism industry in states like Hawaii? No, thanks, if I performed at my job in the private sector like most bureaucrats I see in the p.s., I would be out of a job. And government prolonged the Great Depression for 10 years, until it hit upon starting world wars to get out of the messes it creates. Government is a drain on prosperity, not the cause of prosperity. If it weren't for entrepreneurs in the private sector, you would have no productivity to tax. But congratulations, you bureaucrats have pretty much destroyed the golden goose anyway.

  17. JayMarie says:

    Almost but not quite correct. Clinton in keeping promises to cut the military pink slipped active duty personnel and then contracted out to civilian (unions mostly) contractors. One military person can do multiple jobs, a union employee can only do one job. Military personnel are constantly training in all fields of their specialty, plus sub, ship, air, etc… non-specific mos/rating. One specific case: A Commander was decommissioned on a Friday – hung up his uniform, on Monday he returned to work at the exact same place to do the exact same job in civvies with a pay raise 3 x's greater than his previous military scale pay. How did that save money? It didn't, but, it did come from a different source of funding thus Clinton kept his word, the military force was reduced, tax payers just paid more for the same service!

  18. You said it there Sam – "the truth is that a majority of the people accept taxes and big government." It was a strange event in the late 1700's in colonial America – the people wanted to be left alone and didn't take kindly to the smallest interventions.

  19. Spikeygrrl says:

    Surely the author does not intend to lump in our brave young servicemen and -women with administrators of utterly unnecessary bloated bureaucracies?

    Find me ONE powdered, pampered Washington functionary who could last ONE WEEK in boot camp — let alone volunteer for it in the first place! — and I will cordially suggest to that bureaucrat that they're probably in the wrong line of…uhhh, "work."

    Just sign me — military wife

  20. Stop with the "brave young servicemen and -women" nonsense. The vast majority of people in the military are no where near the front line. The govt has used its "Support the Troops" meme only to stifle dissent in the empire it created, pretty smart actually although our victims in foreign lands probably disagree.

    Many in the military dread the responsibilities of the private sector. Truth is the military is a relatively easy life, you are told what to do, when and where to do it, and how to do it. No initiative needed.

    And boot camp today has been softened to the point where you would have to be mentally or physically handicapped not to get through.

    You can sign me — overburdened taxpayer

  21. Waste has been going on forever. Obama has nothing to do with it any more than any other President. Quit trying to blame things that have always been the way they are on Obama. Bush promoted the same kind of waste and added to it exponentially with all the immoral and ridiculous wars. Oh, uh, don't mention the money squandered by the Neocon wars…! Or the economic collapse brought on by the Bush administration. Bury head in sand!

  22. The idea that "Private companies did not get us out of the Great Depression. It was the Government" is a myth, it is false.
    See here: Murphy Sets the Record Straight http://www.lewrockwell.com/orig10/smith-g.f2.html
    And here: The Myth of War Prosperity http://www.lewrockwell.com/gregory/gregory132.htm

  23. Also, government workers are NOT taxpayers – when they "pay" taxes their income is cut – that is all.
    I find it amazing People can't see it this way.

  24. Jason Calley says:

    Sadly, Fred, I have to agree with you. If our military really were composed of brave men and women working in service to our country, they would be busy defending the Constitution. We will know that they are finally doing that when we see them marching on Washington, D.C.

  25. Mark James says:

    A good article, except that the base should be the number of people _employed_ in the US which is closer to 140 Million people. This makes for a ratio of close to 30% of people working for the government in one way or another. And the statement that 17% owe their living to the tax payer is incorrect as well since a good portion of the 140 Million employed don't pay taxes. So the numbers are even worse. Unsustainable …

  26. Texas Chris says:

    They marched on Dc a couple of months ago, 2000+ of them. Didn't see it on the news? I wonder why?

  27. No shit. I work for a large county government (believe me I am trying to get the hell out) and am paid with tax payer money. Sure, I pay taxes also, but my salary comes from taxes, even taken from myself. There is no other way around it. If you are a government worker, or a contractor that makes your money off of the government, then you are a net tax receiver. This means you're a leech.

  28. Off the tracks says:

    Here here, and if we're looking at a realistic picture of unemployment at say the 15 to 20% range, we're facing the tipping point with confidence men leading the country.

  29. thefederalfarmer says:

    So basically because I run a successful business that happens to include a government entity as a customer, when I lose them as a customer I will be "forced to become productive". Did the thought ever cross your mind that I already am productive and government business is just frosting on the cake BECAUSE of my productivity? Sometimes you take the rhetoric just a bit too far and throw out us babies with the bathwater.

  30. Outsider says:

    If millions of gov't workers lose their jobs, how will the private sector be able to absorb them? The private sector has become more & more efficient and does not need nearly as many workers as before. We cannot all remain busy selling things to each other.

  31. I fear it won't be that pretty. The government employees will simply demand more from the productive as they have always done. They will demand more until there is no more. Then they will eventually be turned lose into the productive economy that has been striped of all capital and regulation prevents most everyone from starting businesses in most everything. Taxes will remain extremely high as the remaining members of the parasite class, those that out maneuvered those who were turned lose, will refuse to allow taxes to fall or productive labor to prosper.

    Essentially I see the government workers will fight each other over what is left to take from the productive people until complete devastation with little chance of reversal is reached.

  32. Spikeygrrl says:

    One thing you are evidently NOT overburdened with is accurate information.

    The bravery of our troops is without question. Just ask my military husband who, as an active-duty trauma medic, has to sew them up.

    And you, sir, should be ashamed of yourself for badmouthing — yes — THOSE BRAVE MEN AND WOMEN who literally put themselves in the line of fire to (inter alia) protect and defend your Constitutional right to spout such vile slurs in a public forum.

  33. Strip millions of people of their government pensions they earned, while stopping Social Security benefits when the fund runs out. The future is very bleak…widespread looting and starvation. It will become chaos as people go into their survival mode and fight each other for food, water and shelter.

  34. Would all you f'ing douchebags learn how to write and spell?! It is an tedious chore in frustration to read your second-grade drivel. All government workers are parasites. Frontierism will bring back men and weed out pussies. You government "contractors" that already are "successful" and rape us taxpayers as "frosting" need to choke to death on your own parasitic "cake". Government…local, state, and federal…are riding on borrowed time and are in for ass-whooping frontier justice…and it will be one hell of a pleasure to mete it out to all of 'em…from DMV assholes to corrupt killer cops to mental midget TSA all the way to Obama and his entire traitorous treasonous cotillion. We warned you ~235+ years ago…DON'T TREAD ON ME!!!