The graph above shows the number of people employed in the U.S. government (excluding armed forces and intelligence agencies, but including the postal service). This number has increased almost continuously: The few exceptions are immediately after World War II, in the early 1980s, and since the previous recession. Note also that small spikes occur every ten years, owing to the temporary hiring for the census.
But does this picture tell a true story of an ever-expanding government? The graph spans almost 80 years, and over that period the U.S. population has continuously expanded. So a more-realistic picture would need to calculate the share of government employment in total employment. This is shown in the graph below. The picture looks quite different now: The current share of government employment is actually very low, and one has to go back to 1960 to find a lower number! The highest point is in 1975, not 2010 as in the first graph. Clearly, context matters.
How these graphs were created: Search for “government employees” and select “All Employees: Government” (series ID: USGOVT) for the first graph. For the second graph, add the series “All Employees: Total Nonfarm Payrolls” to series 1 through the “Modify existing series” option. Use the “Create your own data transformation” option to apply the formula a/b*100 to express the result in percentages.
Suggested by Christian Zimmermann
View on FRED, series used in this post: