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FOR IMMEDIATE RELEASE Contact:Paul Soutar 
May 13, 2009
(316) 634-0218
Government Growth Adds to Private Sector Burden
The most recent State employment data from the U. S. Bureau of Labor Statistics shows that government continues to expand in Kansaswhile the private sector is shedding jobs. Over the twelve-monthperiod ending in March, government jobs increased by 3,600 whileKansas lost 25,300 private sector jobs. Local government employmentincreased by 2,300 and federal jobs grew by 1,300; state employmentwas unchanged. Private sector job losses do not reflect all of therecently announced layoffs, primarily in aviation manufacturing,tracked by Workforce Alliance of South Central Kansas.Government jobs also expanded across the nation as private sectoremployment shrank, although not at the same pace as in Kansas.Private sector losses are not as severe as the national trend (2.3%decline vs. 4.4%), but government employment growth in Kansas isoutpacing the nation (1.4% vs. 0.4%).The inverse relationship between government and private sectoremployment does not bode well for the economy. “Economic researchhas consistently shown that the larger the government is relative to theeconomy, the slower the economy grows,” said Dr. Art Hall, ExecutiveDirector of the Center for Applied Economics at the University of Kansas School of Business. “We’ve known about that empirical datainternationally and now it’s showing up at the local level.”Americans for Prosperity released a recent study by Arduin, Laffer & Moore Econometrics showing thehistorical negative impact of increased government spending on the private sector. According to thestudy, the cost of accepting federal dollars from the American Recovery and Reinvestment Act (ARRA)of 2009 will reduce real net business output by 2.5%, which translates to a reduction of 1.7 million jobsannually – of which between 17,200 and 22,200 will be lost in Kansas.Hall says adding some government jobs can help but others just cause more problems. “The more we dothis in the name of trying to help, the more we’re causing damage. It’s very much like overhead inbusiness. Some overhead adds value, too much sinks the business.”
 
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