The front lines of bureaucratic bloat: The labor market

OPINION:

Perhaps the best illustration of why America desperately needs the Department of Government Efficiency is that government workers cost 42.1% more than their private-sector counterparts, according to the latest data from the Bureau of Labor Statistics.

Either government workers are the best and the brightest around, producing world-class results, or the taxpayers aren’t getting their money’s worth.

Anyone who has been to their local department of motor vehicles lately knows it’s the latter. Because government lacks the same incentive structure as the private sector, wasteful labor expenses are commonplace.

For a business, labor is cost that will only be undertaken if the corresponding benefit exceeds that cost. An employee who adds $5 an hour but costs $15 an hour won’t be hired, but one who adds $20 an hour while costing $15 an hour will be hired in a heartbeat.

This is because the business operates on a profit incentive. The firm’s owner is acutely aware that all business decisions affect the bottom line and thus his or her personal pocketbook.

That’s not the case for government bureaucrats, who are spending the taxpayers’ money daily but are themselves immune from the ramifications of their own actions. It’s not the bureaucrats’ money, so they have no incentive to ensure it’s spent efficiently.

It’s also very difficult to fire a government worker, which creates tremendous incentive for that worker to slack off and do as little work as possible. This creates today’s scenario where government employees are well paid for little work.

This is not to say that all government workers are lazy bureaucrats who deserve to be fired. Some of them are true public servants who efficiently do the work set before them, but the data indicate many government workers do not fit this description.

In the last quarter of 2024, the most recent data available, the average hourly cost to employ a worker in the private sector was $44.67. Government workers, on the other hand, cost $63.46 per hour on average, or 42.1% more.

These costs reflect not just wages or salaries but also benefits — which are infamously generous for government workers. The average hourly cost to an employer of a private sector worker’s benefits is $13.20. For a government worker, the employer’s cost is $24.23, or a whopping 83.6% higher.

In exchange for this much higher cost of employment, the taxpayer gets lackluster results, which is why DOGE is hell-bent on reducing the headcount of government employees. Many states are now looking into joining this crusade against labor market waste to reduce government employment at all levels: federal, state, and local.

DOGE has already achieved remarkable results, identifying tens of thousands of unnecessary positions in the federal workforce. When department and agency heads are equipped with this knowledge, they can take the required steps to eliminate this waste from government payrolls and save taxpayers billions of dollars annually.

In the last monthly employment report from the Bureau of Labor Statistics, federal government payrolls declined by 10,000. This is in stark contrast to the previous administration, which saw government payrolls explode to new records. In fact, right before the November presidential election, government employment increased by over 700,000 in a single month.

While all those people working for the government does wonders for the nominal unemployment rate, it does not represent economic growth or an improvement in the average American’s standard of living. Those government workers are costing taxpayers dearly without adding anything to the productive private sector.

DOGE is off to a great start, but there is still a long way to go. Rogue judges and deeply entrenched bureaucrats are doing everything they can to protect the inefficient status quo, including their own bloated salaries and benefits packages. For the sake of the taxpayer, let’s hope DOGE keeps delivering victories.