Are Pubic Employees Wealth Creators or Wealth Destroyers?

June 12, 2014

Phyllis Hunsinger is the President and founding member of the FREE Foundation (Freedom and Responsibility Education Enterprise) headquartered in Western Colorado.

Thoughts on a Free Market Economy… “Public versus Private Employees”

By Phyllis Hunsinger April 1, 2014


What is a public employee? Simply speaking a public employee works for an organization that is owned and operated by a governmental entity. The government can be federal, state, county, or municipal. Some typical examples of governmental organizations are postal, police and prison systems, education, some health care and safety agencies, roads and highway departments, and defense; however, there are many more including organizations with government contracts.

What is a private employee? A private employee works for a business or an organization that is privately owned and is not being contracted by a government entity. Some examples of privately owned business would be banks, retail stores, trades, restaurants, and other local businesses. Private enterprise includes both for-profit and non-profit organizations; the distinction is that government funds do not support the enterprise.

In 2012, a report compiled by Hall and Greene for George Mason University’s Mercatus Center stated “public-sector employment made up more than 16 percent of the U.S. labor market.” When factoring in those employees working for companies with government contracts, the report stated the percentage increases to over 19 percent.

To understand the importance of the above statistic, consider the fact that the only way any government entity has money is to first confiscate the money from its citizens through taxes. Even though public employees also pay taxes on their salaries, the salary for the public employee originates from collected taxes. Increasing the number of government employees results in more money in salaries taken out of the taxes collected; leaves fewer private employees producing to grow the economy; and encumbers the private sector to pay for increasing numbers of government workers. Understanding the difference between public and private employees and who pays their salaries is important.

The government does not produce anything to grow the economy; therefore, limiting the numbers of government employees is critical to a vibrant, healthy economy., Phyllis Hunsinger © 2013 All Rights Reserved

Posted with permission of the author on 6/12/14

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