According to the Redwood Falls Gazette, Rep. Marty Seifert received the Minnesota Licensed Beverage Association's Legislator of the Year Award Monday. In his remarks, the House Minority Leader made some comments that we may be hearing again during the legislative seasons.
Seifert said in 1972 the top three job providers in the state of Minnesota were 3M, Honeywell and Dayton-Hudson.
They were big companies that provide good benefits to their employees and families.
"Today three of the top five employers in the state are State of Minnesota, the University of Minnesota and federal government," Seifert said. "I don't know about you, but that is getting to be a little bit scary in terms of fewer and fewer job providers because o[f] more and more regulations and taxes."
"You folks are pulling the wagon," Seifert added. "And everyone else is riding on the wagon."
We're certain Rep. Seifert did not mean public sector jobs do not provide good benefits to employees. After all, he himself draws two has drawn paychecks from the taxpayers — one as a legislator and one as an admissions officer for Southwest Minnesota State University.
Instead, he repeats a different and even less supportable horror story: Big Bad Government is bumping off private enterprise.
Here's his story line: Private employment is giving way to public employment in the state; growing regulation and taxes are responsible; and small businesses like bar owners and liquor distributors are pulling the wagon for a bunch of freeloaders.
Picking 1972 for his comparison puts solid data a bit out of reach, but some of the beverage sellers in his audience might recall that a lot of things were different then.
Bars were selling Hamm's and Grain Belt, and two of the nation's biggest brewers were Pabst and Schlitz. Honeywell was in the computer business and weapons business then. Dayton-Hudson was opening its 100th B. Dalton, Bookseller store and was considering selling off its Target discount chain, which had started well but was sputtering.
There's no question Minnesota's corporate employment has shifted from those old guard companies. (Even 3M, which was 57th on the Fortune 500 list in 1972, has dropped to 97th today.) And if the decline of those big, patriarchal employers is your point of reference, these structural shifts in employment may indeed be troubling.
It's plain misleading to imply with the example that big private employers have been displaced by big government. Or that government is the cause of the real pain being felt today by low- and middle-income families.
The Minnesota Department of Employment and Economic Development publishes comprehensive employment statistics going back to 1990. In that year, government employment was 16.2 percent of the total. In 2007, it was 15.5 percent. I examined the 17-year trends line for private jobs growth vs. growth for federal, state and local jobs in Minnesota.
Here's a chart showing growth rates for total employment and government employment [click to enlarge]. You can see the steeper blue growth line for total employment. The growing divergence of the lines is similar for jobs broken out at federal, state and local levels.
Back to Rep. Seifert's statement, it would make sense that as large companies move, restructure and go out of business, the more stable government sector would become relatively "bigger." After all, we don't outsource road maintenance to India, New Jersey hasn't launched a takeover of Dakota County, and the state colleges don't move to South Dakota because the taxes are lower!
Seifert's claim of "fewer and fewer job providers" is simply wrong. If total employment grows and large companies account for fewer jobs, we should actually have more private job providers in the state. And that's the case — from 148,715 in 2000 to 161,300 in 2006.
In another post, I'll show other reasons this "big government riding the wagon" story is — dare I say it? — a fairy tale.
— Charlie Quimby