Our incredible shrinking government

Inspired by Jonathan Chait:  When you take population growth into account, the federal government isn’t getting larger.   Here’s the ratio of federal government employees to population since 1950:

federal_govt_employee_pct

The ratio is down over 1/3 since the late-1960s.  (The spikes every ten years are temporary workers hired to conduct the census.  The greyed periods indicate recessions.)  The state government employee fraction (total number of employees divided by total population) rose steadily from about 1955 until 1980.  It rattled around between 1.6% and 1.75% of population from 1980 until the start the Great Recession and has fallen since then.  Here’s the data:

state_govt_employee_pct

The trend for local government employment is similar:

local_govt_employee_pct

The data indicate that local governments have contracted by about 10% since the start of the Great Recession.   Bottom line:  Next time someone tells you that government is growing out of control ask them what exactly they’re referring to.

Investigate the data for yourself at the St. Louis Fed’s website.