Greece is laying off government employees in response to its financial crisis. Over the next few years, as many as a quarter of the government work force might be let go.
Private-sector companies have used downsizing for a number of years. When revenue falls or productivity gains make a work force reduction possible, companies cut their payrolls. Governments have gone in the opposite direction and have been expanding for years.
Surprisingly given all of the problems Greece faces, government payrolls are not excessive when compared with other countries. According to recent Organization of Economic Co-Operation and Development (OECD) data comparing the percentage of government employment as part of the work force, with 14.1 percent of its work force employed by the government, Greece was tied for 11th out of 26 countries.
The OECD data showed the United States had the same percentage of government workers as Greece did. Both countries had a higher percentage than fiscally challenged Spain and Portugal.
More recent Bureau of Labor Statistics data show that 16.2 percent of the U.S. work force is now employed by the government.
In addition to directly employing more than 21.8 million people, local, state and federal government agencies also use contractors. Estimates show that the federal government alone may have an additional 10.5 million contract employees.
Counting federal contractors, at least 24 percent of jobs in the United States are funded by the 103 million taxpayers working in the private sector.
In other words, a population of 313 million Americans is effectively being supported by 102 million private sector employees.
Excessive government debt is causing Greece to lay off civil servants. The United States, where less than a third of the population is working in the private sector, could learn from Greece.
© 2013 Moneynews. All rights reserved.