Tuesday, July 20, 2010

Unemployed? - Want A Job? D.C. is the place to go.

Cross-posted from Gerry Charlotte Phelps

Washington D.C. Booms, Country Suffers

From "Washington Booms, Country Struggles" by Jim Vanderhei and Zachary Abrahamson, 7-19-10, Politico. While the country is struggling, Washington's governing class is doing extremely well.
The massive expansion of government under President Barack Obama has basically guaranteed a robust job market for policy professionals, regulators and contractors for years to come. The housing market, boosted by the large number of high-income earners in the area, many working in politics and government, is easily outpacing the markets in most of the country. And there are few signs of economic distress in hotels, restaurants or stores in the D.C. metro area.

As a result, there is a yawning gap between the American people and D.C.’s powerful when it comes to their economic reality — and their economic perceptions.
A new poll shows the harsh divide:  About 45% of "Washington elites", but only 25% of the general population, said they thought the country and economy were headed in the right direction.  The Washington elites were aware of their advantageous situation.  About 74% said the recession has hurt them less than most Americans.  Washington has lost fewer employees than any of the nations 15 largest urban areas.  Unemployment is only 6% - well below the national average of 9.5%.  It is a tiny fraction of unemployment in manufacturing towns like Flint, Mich (14.7%), Elkhart, Ind. (13.7%) and Rockford, Ill. (13.9%.)
In part, that’s because the federal government drives about a third of the national capital region’s economy by direct employment — Uncle Sam employs about 10 percent of the area’s 3 million-person work force — or by federal procurement dollars, more than $20 billion of which landed in nearby Fairfax County, Va., alone last year.
“This is our auto industry, or financial services, or entertainment,” said Stephen Fuller, director of George Mason University’s Center for Regional Analysis....“The federal government is our business. And on top of that, we have an administration that’s clearly expanding the role of the federal government...That hasn’t been the case in the past, except in the case of wars.”
Those outside Washington also come to Washington to create new jobs.
Many New York firms have opened new offices and created new jobs in D.C. to deal with the growing web of regulations. Northrop Grumman — one of many contractors profiting from government growth — is moving its operations from Southern California to Northern Virginia. Several other firms have moved here of late, too.

Even media companies, which have been hammered by the economy and bad industry-wide trends, are hiring in town. Competition among Bloomberg, POLITICO and other outlets has resulted in bidding wars for reporters with sophisticated understanding of government policy.
Then, of course, there will be even more well-paid agency jobs due to "reforms" of the nation's health insurance sector and financial markets.  More money is on the way to Washington from all over the country!
Both bills call for substantial new federal oversight by agencies such as the Health and Human Services Department and the Internal Revenue Service. And the professionals who take those jobs will need homes, buy furniture and pay taxes, said David Robertson, executive director of the Metropolitan Washington Council of Governments, “and that’s going to have a multiplier effect in our region.”

The Center for Regional Analysis projects the federal government will add 6,500 new jobs in the area each year through 2012.
What is the political result?  Much of America now has a low opinion of the Washington governing class.  It has led to the growth of movements like moveon.org and the Tea Parties, which oppose the establishments of both parties.  Meanwhile, Washington seems just not to "get it."  Says Mark Penn, who helped conduct the poll,
 “The D.C. elites are largely isolated from the economic downturn, and this means that they can easily fail to understand the depth of dissatisfaction out in the country.”

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