Government employment is at historic lows, largely due to draconian budget cuts at the state and local levels throughout the recession. The sector has now lost more jobs than any other major industry over the past three years, Bloomberg Government points out:


(Source: Bloomberg Government)

Without those job losses, the unemployment rate would be more than a full percentage point lower:

Had the percentage of people working for government held at the 2001-2007 average of 9.7 percent, about 1.7 million more Americans would have been employed in June and the jobless rate would have been 7.1 percent rather than 8.2 percent, according to economists Michael Greenstone and Adam Looney of the Hamilton Project at the Brookings Institution in Washington.