Md., Va. among top five states for government-funded jobs

December 03, 2013 at 10:55 pm

Map of U.S. Taxpayer funded jobsMaryland and Virginia are among the top five states in the nation in the dubious competition for most government-financed employment, according to a new economic study.

It turns out Virginia, Maryland’s closest fierce competitor for business, edges out Maryland in most categories for taxpayer-funded jobs, according to a study conducted by Keith Hall, former commissioner of the federal Bureau of Labor Statistics. He is now a senior research fellow at the Mercatus Center of the George Mason University.

Maryland ranks fifth in the nation for the number of public-sector and federal contract jobs as a percentage of total jobs at 27.3%, but Virginia ranks second at 29.8%, with New Mexico topping the charts at 31.9% due its military bases, defense laboratories and federal lands. (See map.)

Map of U.S. Private-sector jobs“The combined total of federal contract-funded jobs and public-sector employment serves as more accurate indication of each state’s labor market reliance on government spending than direct public sector employment,” said Hall and project coordinator Robert Green in a summary.

Turning that number around, “real private-sector jobs” as a percentage of total jobs was 72.7% in Maryland and 70.2% in Virginia. By contrast, two of Maryland’s neighbors, Delaware and Pennsylvania, are among the six states with the highest percentage of “real private-sector jobs,” at above 84%, and are also the states with the lowest percentage of government-funded employment.

Maryland’s economic dependence on the federal government and its contractors has been well known for decades.

Chart of federal spending in Maryland

Source: Maryland Department of Legislative Services, Spending Affordability briefing, Oct. 16, 2013

It has been a particularly hot topic in recent months as the U.S. government experienced a temporary shutdown and budget cuts through sequestration.

Federal government Maryland’s ‘natural resource’

Compared to other states with oil, gas and minerals underground, “we’ve got the federal government, that’s our natural resource,” Warren Deschenaux, the legislature’s chief fiscal advisor, told lawmakers in October.

According to charts prepared by the Department of Legislative Services, federal contract spending in Maryland is down slightly from its highest point in 2008 and 2009, and federal government employment as a percentage of total Maryland jobs is actually down from 1995. But federal government wage income as a percentage of total wage income is higher than it was back then (see chart from Spending Affordability Committee briefing, p. 21).

Both Maryland and Virginia showed losses in real private-sector jobs from 2007 to 2012, but so did all but a handful of states.

The study used U.S. government labor data and contract spending from USASpending.gov to calculate the figures. The Mercatus Center is a free-market oriented think-tank.

–Len Lazarick

Len@MarylandReporter.com

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  • dwb1

    This study under counts the true reliance on the Fed Govt: There are a lot of lobbyists and lawyers in MD and VA area, esp in Howard and Montgomery counties, whose job it is to manage the relationship with the federal govt, participate in rule-making, and so on. Those are being counted as private sector jobs, but they really are not.

  • Angie Boyter

    Thanks for a very informative article. It seems to confirm some things I have suspected but had no data about. The charts on federal employment as a % of total employment and federally derived wages as a % of total wages are revealing—the dollars as a % of total wages is increasing even though the jobs as a % of total jobs has not been increasing. I see two factors at work: 1.) federal salaries are increasing due to grade creep and pay raises, and 2) contractors are an increasing part of the workforce, and they are paid more than civil servants, in general. I hear, too, that there have also been a fair number of well-paying jobs lost in the private sector, which would contribute to the situation as well.
    It would be very interesting to see what this would look like if you included state and local spending. My intuitive sense is that local governments are also expanding and paying better salaries.

  • MD Reader

    I don’t doubt MD and VA are high on the list of jobs created by Federal spending. However:

    Mercatus’ report doesn’t explain its methodology for massaging USASpending.gov data to obtain government-funded jobs by state. It would be rough to obtain reliable results within +/- 20%. For instance, FEMA awards for Sandy get reported in the states (mostly NY, NJ) and the spending happens in state budgets but many of the jobs are not created in those states. Take lumber and building materials….those jobs are not in NY and NJ.

    USASpending.gov is slowly improving but is notoriously low quality and, by design, it is incomplete. Legislative and Judicial branches are excluded as well as much of the “black box” spending such as NSA. I think it excludes spending for social security, medicare, and veteran’s benefits programs. Also, most data come from budgetary accounting, which has many timing differences and countless adjustments to get to disbursements data. I think agency reporting on this site is still voluntary. USASpending.gov does not capture jobs created indirectly from the Federal spending…for instance, social security beneficiary spending creates many uncounted jobs.

  • http://www.granted.com/ Andrew Ostler

    It’s good to see that Maryland and Virginia are high the amount of government funded jobs, as that means there are definitely more opportunities for these jobs in those states than in many other states. However, actually finding and applying for these jobs is not always as easy as it sounds. Luckily, Granted can you help in your job search. It is a free job website that offers more than 2 million listings, including many government jobs.