As much as I generally agree with a new OpEd by California Governor Arnold Schwarzenegger, I have to take issue with a key graph. In it he tries to show that California public employees have been nowhere nearly as badly as affected by the ongoing economic depression as have private sector employees. While that is almost certainly true, the graph that he (or the WSJ) uses to make that point is misleading.
Here is the graph:
I’m mostly interested in the upper half of the graph. In it we see the number of private sector employees who have lost jobs in the last two years compared to the number of public employees. One is big, and the other is small. Really small.
The trouble, of course, is that we are comparing very different things. The California private sector workforce is approximately 13m people, while the (non-Federal) California public sector workforce is approximately 2m. There is, in short, a 6.5x difference in the size of the respective workforces. Turning that around, current public sector job losses of 50,000 people would correspond to losses of 325,000 in the larger private sector. Granted, that’s still only-one quarter of the current private sector losses, so the asymmetry remains, but adjusting for population sizes, or simply using percentages, would make the comparison a lot more sensible. [-]