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Topics: Labor Unions

Labor Secretary Thomas Perez says unemployment rate caused by local governments not hiring enough

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Columnists,Sean Higgins,Labor unions,Labor,Analysis,Thomas Perez,Unemployment

In a speech to the AFL-CIO's quadrennial convention in Los Angeles on Tuesday, newly-installed Labor Secretary Thomas Perez said the nation's high unemployment rate was partly the result of local governments not hiring enough.

"[T]he public sector ... has been such an important steppingstone to the middle class for so many. This is the first economic recovery in American history in which government jobs haven't come back. If state and local employment had held steady during the recovery instead of losing half a million jobs, the unemployment rate would be below 7 percent," Perez said, according to his prepared remarks.

That's contrary to what most economists say. Government spending tends to crowd out private sector spending while also being less efficient. The result is usually a wash in terms of job creation.

Perez is at least in tune with the current administration. President Obama has made the same argument regarding the unemployment rate.

In June 2008, Obama told reporters that lack of public sector spending was the main problem with the economy. "The private sector is doing fine. Where we're seeing weaknesses in our economy have to do with state and local government," he said.

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Sean Higgins

Senior Writer
The Washington Examiner