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Why Did the Unemployment Rate Drop?

The U.S. added 120,000 jobs in November, but the unemployment rate posted a huge drop to 8.6% from 9% and a broader unemployment rate fell even more to 15.6% from 16.2%. Why?

For decades, public sector unions have peddled the fantasy that government employees were paid less than their counterparts in the private sector. In fact, the pay disparity is the other way around. Government workers, especially at the federal level, make salaries that are scandalously higher than those paid to private sector workers. And let's not forget private sector workers not only have to be sufficiently productive to earn their paychecks, they also must pay the taxes that support the more generous jobs in the public sector.

For decades, public sector unions have peddled the fantasy that government employees were paid less than their counterparts in the private sector. In fact, the pay disparity is the other way around. Government workers, especially at the federal level, make salaries that are scandalously higher than those paid to private sector workers. And let's not forget private sector workers not only have to be sufficiently productive to earn their paychecks, they also must pay the taxes that support the more generous jobs in the public sector.

Government jobs may not sound lucrative, but state and local government employees make $12 more per hour than private workers, according to a recent report from the Bureau of Labor Statistics (BLS).

Spain's King Juan Carlos and his family are to take a pay cut following a recent bitterly contested cut to public sector wages, the royal palace says. The king will lose 20,900 euros (£16,400; $25,660) from his salary of just over 292,000 euros for the year - a cut of 7.1%. In total, the 8.3m euro royal budget will be cut by 100,000 euros in 2012. Public sector workers have been outraged by a recent announcement that Christmas bonuses are to go. The bonuses saw public sector workers paid double their usual salaries in December, and their removal equates to a cut of about 7%.

Employers who pay their workers cash under the table to avoid payroll taxes, workers' compensation insurance and other government mandates are costing California about $7 billion annually in lost tax revenue and undercutting companies that play by the rules, state officials say.

This comes from Business Insider, and it provides a natural follow-up to my post from last week as to why public-sector workers are more optimistic than private-sector employees. For the first time, the US has more government workers than goods-producing workers:

Freedom of religion is the most powerful constitutional protection left in America. It is on a collision course with the contraception mandate in the Patient Protection and Affordable Care Act (Obamacare). The mandate requires employers with more than 50 workers to provide health plans that include contraceptives and abortion-inducing drugs.

The youngest of veterans, aged 18 to 24, had a 30.4 percent jobless rate in October, way up from 18.4 percent a year earlier.