Government Boomtowns: The New Detroit?

While the number of private sector jobs shrinks, places with higher proportions of government workers are doing quite well. It's estimated that public servants will see wage increases of 2% or more this year.

"Last year, home building nose-dived throughout Canada-except in Ottawa, where industry is scant and one in five workers draws a government paycheck. In the Canadian capital the resale price for condos jumped nearly 12 percent in 2008 and 5.7 percent for single-family homes. No wonder, given that federal employees enjoy a 41 percent wage premium over private-sector workers. As Toronto Star columnist Jim Travers wrote recently, 'Hard times arrive here in mink slippers.'

Ditto Washington, where 28 percent of the District's paychecks are cut by the various layers of the federal bureaucracy. While the private sector has shed 4.6 million jobs since December 2007, when the economic contraction began, the federal government has hired 200,000 workers, according to the Bureau of Labor Statistics. The new administration will likely create another 400,000 temporary jobs and 180,000 permanent ones. No wonder D.C., without a factory in sight, was the nation's second-fastest-growing job market (after Alaska) in 2008."

Full Story: Cities Beyond the Pain

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