The Editorial: The Wrong Ratio
March 29, 2010
Not one state in our country provides more manufacturing jobs than government jobs.
Last month, the Indianapolis Star reported that, for the first time in Indiana’s history, more people in the state work in government than in manufacturing.
According to newly released data from the federal Bureau of Labor Statistics (BLS), 430,800 people worked in factories throughout Indiana in January 2010. At the same time, 442,800 people worked for federal, state or local governmental organizations, including schools and publicly owned hospitals. Government is now the No. 2 employer in Indiana, behind only retailers. Manufacturing is third, accounting for 16 percent of the workforce.
It wasn’t always so. Indeed, in January 2000, the ratio of manufacturing jobs to government jobs in Indiana was a healthy 166 percent, the highest such ratio in the country. However, over the next 10 years, Indiana lost 36 percent of its manufacturing jobs. In that same time period, government jobs increased 10 percent, partly due to an increase in schools and city services related to the state’s 5 percent gain in population.
We wondered whether the situation in Indiana was an aberration or a trend. So, we did our own exclusive analysis of the BLS data. Our findings are alarming.
In 1990, 21 states could claim more manufacturing jobs than government jobs. In 2000, only 14 states could do so. In 2010, not one state had more manufacturing jobs than government ones. Indiana was the last. (Three states-Alabama, Delaware and Hawaii-are not listed among the BLS data for manufacturing jobs, so they were excluded from our analysis.)
In January 1990, the ratio of manufacturing jobs to government jobs was 132 percent in Michigan, 138 percent in Pennsylvania, 146 percent in Ohio, and 175 percent in North Carolina. In January 2010, those ratios were 72 percent, 73 percent, 78 percent and 59 percent, respectively. For the United States as a whole, the ratio of manufacturing jobs to government jobs was 98 percent in January 1990. Twenty years later, that ratio stands at just 51 percent. In other words, government jobs outnumber manufacturing jobs by a 2-to-1 margin.
How did this happen? Whether due to financial crises, overseas competition, unions, automation, onerous taxes and regulations, or rising healthcare costs, the United States lost approximately 36 percent of its manufacturing jobs between January 1990 and January 2010. At the same time, government jobs increased by 23 percent.
We do not wish to cast aspersions on government workers, but this trend is untenable. Most of our state governments are billions in the red as it is. If our economy is to enjoy long-term growth, we must develop more private sector jobs-especially manufacturing jobs-and fewer public sector ones.