Although the US is considered a capitalist country, there are now more government employees than factory workers. President Biden claims to have created more jobs than any other president, yet the sector with the largest job gains was government, while manufacturing was near the bottom. The US currently has 23 million government workers compared to just 13 million factory workers. Out of the entire workforce of 268.6 million, government jobs account for 8.5% of total employment in the US. In Austria, a country that is much more socialist than the US, government employment makes up only 3.9% of the workforce.
The key difference between a factory worker and a government employee is that a factory worker contributes directly to the economy. In the first quarter of 2024, manufacturers contributed $2.87 trillion to the U.S. economy. Manufacturing, not government, is also a major attractor of foreign direct investment (FDI). In 2023, U.S. manufacturing attracted $2.2 trillion in FDI, accounting for about 40% of the total $5.39 trillion in FDI.
FDI is another area where the government sector impact on the economy differs from manufacturing. When the government prints money, it leads to a decrease in the value of the dollar due to increased supply, which drives inflation. In contrast, FDI involves foreign investors buying U.S. dollars to invest in domestic companies, which increases demand for the dollar, raises its value, and helps to curb inflation.
When Biden extended the economic lockdown and then drove up the deficit and national debt to mitigate the problem he helped create, he told the country that his $1.9 trillion fiscal package would have a multiplier effect. The idea is that if the government gives you a dollar you didn’t earn and you buy groceries, the grocery store gets the dollar and uses it to pay wages, and the workers buy things… So each dollar the government gives away for free supposedly has an impact of $2.50 on the economy.
The multiplier effect is real, though the exact impact—whether $2.50 or $2.69—is debatable. The same concept applies to dollars earned. When a factory sells products, it uses the revenue to pay wages, and workers then spend that money, similar to the government stimulus scenario. However, the key difference is that government stimulus increases the deficit and debt, which must be repaid later, along with interest. Moreover, the ‘free money’ from the government also contributes to inflation. Therefore, it makes more sense to grow the economy by encouraging people to work in productive fields rather than relying on government stimulus.
The irony in all of this is that despite the destructive COVID lockdowns leading to the loss of 1.4 million manufacturing jobs, the manufacturing sector is now facing a labor shortage. The sector is expected to have a shortfall of 2.4 million workers by the year 2030.
The government’s solution to the labor shortfall in manufacturing is focused on diversity, equity, and inclusion (DEI). A government report titled “Diversity, Equity, and Inclusion: Key to Filling High-Skilled Manufacturing Jobs” emphasized statistics showing that the manufacturing sector has become more diverse, with more minorities and women entering the field or co-owning companies. While this may be true, it doesn’t address how DEI will solve the overall worker shortfall. There’s no evidence that the shortfall exists because owners refused to hire certain demographics. The real issue is that fewer people are interested in working in factories.
A basic premise at the heart of all capitalist economic models is that people want to improve their own well-being. In 2022, the average manufacturing worker earned $98,846, including pay and benefits, compared to the average American’s earnings of $83,992. The fact that people are turning down these manufacturing jobs suggests they believe they have alternative options that make them better off, but not necessarily because they will earn more money. They just feel they would be better off not working.
In the Biden economy, it has become more comfortable and socially acceptable to claim unemployment or disability and avoid working. As much as 12% of young people are neither working nor attending school. The percentage of young people on government benefits is now higher than at any point in U.S. history. The labor force participation rate, or the number of people willing to work, remains nearly half a percentage point below what it was under Trump. This indicates that close to 1 million people have decided to stop working and stop looking for work.
Democrats continue to push for a higher minimum wage as a solution to poverty in America. However, high-paying jobs are already available, yet many people are unwilling to work in them. Instead, we’re seeing a rising percentage of people who do not contribute meaningfully to the economy—they’re not making products, they’re not being trained in critical skills, and they’re increasingly relying on government support. This reliance drives up the deficit, debt, and inflation.
Meanwhile, if these factory jobs remain unfilled, companies will either move their operations overseas or lobby for laws allowing illegal immigrants to fill positions that Americans are apparently unwilling to take. Parallel to the growing welfare rolls is the endless creation of government jobs. Whether people are working for the government or living on benefits, they’re relying on tax dollars from a shrinking workforce and are not contributing to production.
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