How Many People Work For The Government?

WEDNESDAY, NOVEMBER 25, 2009

http://burningourmoney.blogspot.com/

How Many People Work For The Government?

How many people work for the government? According to the Major, the answer is none. 

Personally, I think that's a tad harsh. But prompted by a comment on a recent BOM post, we've taken another look at how many are employed by the government.

We start with the official count published by the Office for National Statistics. It says that as of Q2 2009, public sector employment totalled 6.039 million, up from the 5.182 million Labour inherited in 1997 - an increase of 17%* (and see here for some interesting longer-term material). 

However, big though it is, that total excludes a number of groups who are not counted as being employed in the public sector, but who depend on the public sector for the vast bulk of their earnings:

• Higher and further education - for arcane historical reasons, H&FE colleges are defined as being in the private sector, even though most of their funding comes from the taxpayer. When last sighted, they were employing some 530,000 staff.
• GPs - they are counted as part of the NHS by the Department of Health, but most are excluded from the ONS count because they're technically private contractors. There are currently some 40,000 of them in the UK.
• Network Rail - as we've blogged before, Network Rail is nationalised in all but name, but under an extraordinarily convoluted definitional fudge it's counted as part of the private sector. It currently employs 33,000.

Adding these groups back in takes the public sector employment total up to 6.7 million. 

And then of course, there are all the people whose jobs have been privatised over the years, but who still work pretty well exclusively for the public sector - ie hospital cleaners, dustmen, IT staff, etc etc. How many? We have no idea, but our guess is at least another quarter million, taking our public sector employment total up to around 7 million. 

So, of the 28.9 million people currently in employment (see here), around one-quarter of them are employed by the government (aka the taxpayer).

And of course, there's another huge group of people who while not employed by the government, are still dependent on taxpayers for their incomes.

To start with, there are now 5.8 million people of working age who are entirely dependent on welfare (see here), including 1.4m on Job Seeker's Allowance, 2.6m on incapacity benefits, and 0.7m on lone parent benefits. Actually those figures relate to May, and with increased unemployment, the overall total is now probably 6 million.

Adding them in as well, gives us an overall total of 13 million people dependent on taxpayers for their incomes. 

And remember, these are people of working age. If we add in the 12.5 million older people now drawing state pensions, we get to a grand total of 25.5 million - 25.5 million people who are dependent on the taxpayer for most or all of their incomes.

Which is somewhat alarming.

Because on our calculation, we've only got 22 million people who are generating income from sources other than the taxpayer (ie 28.9m in employment less the 7m employed by the public sector). So each one of them has to earn the income to support him/herself plus 1.2 other adults... kind of idea.

Does that sound like it's sustainable?

Or is it time to dust off those dog-eared copies of Bacon and Eltis? (Britain’s economic problem: too few producers by Bacon and Eltis (1976) is not online, but for quick flavour, see here - section 3.1).


*Footnote - although the ONS public sector employment numbers exclude college lecturers and GPs etc, they do now include the 235,000 staff employed by our nationalised banks - ie RBS, Lloyds, Northern Rock, and Bradford & Bingley.