WHITHER GOVERNMENT EMPLOYMENT?

Government has become by far the largest employer in the nation. A few years back manufacturing was the leading sector. But, as we know, manufacturing has been declining as a result of the industry generally shifting labor-intensive work to lower cost countries, such as Mexico or China; outsourcing many labor tasks, such as cleaning for instance, to service companies that specialize on those activities; and continuously replacing capital for labor to improve productivity and reduce costs.
Government has taken manufacturing's place and it currently absorbs about one of every six U.S. workers; that is 16% of U.S. employment as shown in the chart "Employment by Sector."

All of this should come to no surprise, given the continuously increasing government expenditures and the subsequent rise of U.S. government debt. What is surprising, however, is that it is not the Federal government that is responsible for this increase; rather it is government at the State and Local levels behind the increasing predominance of government as the biggest employer.

The chart "Government Employment" shows the percentage increases in the number of workers since 1990, for the three levels of government, i.e. Federal, State and Local units.
Starting with Federal government employment, shown in the red line at the bottom, we can see that employment at the Federal level declined by 10% during the 1990s. Afterwards it has remained more or less at the same level for the last 15 years. (Note that the three sharp jumps in the red line reflect the Federal government's hiring of temporary workers hired to conduct the decennial Census mandated by the U.S. Constitution.)
In contrast State and Local governments, also displayed in the chart, show large increases in employment. Over the last 25 years State employment has increased by 20%, although that increase took place prior to the 2008 economic recession. The increase in Local government employment has been more pronounced yet, although it slowed down a little since the late 2000s because of the 2008 recession. Yet it is still 31% above its level in 1990.

Is Local Employment Growth out of Line?
An obvious question to ask, after seeing employment at the Local level rise by 30%, is whether such growth is out of proportion or far above what would be expected.
If we compare it to employment growth in the private sector- which we display in the chart labeled "Private & Local Government Employment," we can observe several interesting things.

First is that, for most of the time over the last 25 years, employment in private businesses has lagged that of government. That is, Local governments have been more aggressive in their hiring practices.
Second, and perhaps more disturbing, is the fact that while private businesses reduce employment during economic recessions, as they should, the number of employees in Local governments continues to increase. Since Local government revenues probably drop during recessions, i.e. lower receipts from taxes and fees, we would expect them to be more prudent in their hiring practices. But the data suggest otherwise.
Finally, the chart shows that only this year we see employment growth in private businesses match Local governments. This is primarily because Local government employment has remained relatively static since 2012.

What's driving State and Local Government Employment Growth?

Digging deeper we find that that both at the State and Local levels education hiring is the principal driver of employment growth. The chart "State & Local Government Employment" shows that, while total state employment has grown 19% since 1990, education has risen by a remarkable 41% in the same period (here we are comparing growth using 2014 average, rather  than the monthly data shown in the trend chart "Government Employment" above.) Education employment at the Local level has also risen, a more modest 33% but still above the overall growth of 30% for all Local government employment.

Additionally, the chart reveals that the number of Hospital employees at Local governments increased sharply during this period, while at State governments it actually fell. Given the large number of state and local government units it is very difficult, short of a very extensive research, to determine the reasons underlying this uneven pattern. 

Local Government Employment: We are in charge
It's kind of ironic that the area that is presumably most under the direct control of private citizens, Local government, is the one that seems to be growing uncontrolled. But this growth may be actually a reflection of what we want. Education is seen as the key to achieve respectable income, so it should not come as surprise that this is one area that is allowed, or encouraged, to grow the most.
Of course a more meaningful explanation can only result from an analysis of the overall spending in education, employment is only one aspect, and an evaluation of the results from that spending (e.g., school graduation rates, achievement scores.)