Welcome to the government payroll economy!

During my stint in business school back in the eighties, a crusty economics professor often lamented the decline of American manufacturing.  He used to say, and I'm paraphrasing, "Hell, in twenty years all our manufacturing jobs will have moved overseas, and we'll be left just cutting each other's hair."  He was partially right.  The manufacturing employment skid has steepened dramatically since 2000.  According to the Bureau of Labor Statistics about 2.1 million manufacturing jobs have been lost just since December 2007.  But instead of cutting each other's hair, it looks like we'll all be working for Uncle Sam.

This graphic comes from Business Insider by way of Ed Morrissey at Hot Air.

Quoting from Business Insider:

In the just-so story of the evolution of our economy, our old manufacturing based economy has been replaced by an innovative knowledge economy. That's not quite true.



In fact, the decline of the jobs in goods producing sectors of the economy--construction, manufacturing, mining and agriculture--has largely been met with an increase in jobs on the government payroll. We've gone from providing jobs in profit-making private industry to providing jobs in profit-eating government work. Toward the end of 2007, the total number of government jobs exceeded the total number of goods producing jobs. Welcome to the government payroll economy.

Ed Morrissey believes this trend explains why public-sector employees are more optimistic than private-sector employees.  That makes sense.  According to the ADP national employment report released today, 7.4 million private-sector jobs have been lost since the recession began.  Meanwhile, federal employees are keeping their jobs and making more money:

A review of federal salary data by USA Today shows that employees making salaries of $100,000 or more jumped by 5 percent during the recession's first 18 months. That's before overtime pay and bonuses are counted.



During the same 18 months of the recession, the private sector lost 7.3 million jobs.


USA Today says the trend to six-figure salaries is taking place throughout the federal government due to substantial pay raises and new salary rules.


The growth in six-figure salaries has pushed the average federal worker's pay to $71,206, compared with $40,331 in the private sector.

That could inspire optimism or outrage, depending on your point of view.