Public & Private Workplace Sectors: Definition & Differences

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  • 0:04 Public or Private Sector?
  • 0:35 The Public Workplace Sector
  • 1:47 The Private Workplace Sector
  • 3:11 Public Sector vs.…
  • 4:03 Lesson Summary
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Lesson Transcript
Instructor: Beth Hendricks

Beth holds a master's degree in integrated marketing communications, and has worked in journalism and marketing throughout her career.

Public and private workplace sectors run the gamut from police stations to your favorite shopping mall stores. In this lesson, we'll take a look at both sectors and how they differ.

Public or Private Sector?

Jake is fresh out of college and has interviewed for several different types of jobs. The first is in a rural health clinic that serves lower income families. The second is in the back office of a large e-commerce store. Jake knows that the two positions are in vastly different fields, but he doesn't know much more about them. He needs help deciding whether a public sector job or a private one is the better fit for him. This lesson will serve as a primer for Jake on the varying aspects of the two sectors.

The Public Workplace Sector

The public workplace sector is the portion of the economy that falls under the control and guidance of local, state, and federal government. Think about it this way: If the government is responsible for financing the department or organization, such as through collecting taxes or fees, it is a public workplace sector.

Public sector jobs make up a large portion of the U.S. economy and are responsible for a host of services you may use day-to-day and hadn't even considered: postal services, free health clinics, educational institutions, and police and fire services. Other areas of the public sector include departments we consider to be more government-based, such as our military, homeland security, prisons and correctional institutions, and, yes, even departments that collect our taxes.

Sometimes, public and private sector jobs overlap, such as health care facilities, garbage and water services, and social services for veterans, the homeless, children, and the disadvantaged in other categories. Public-run services may sometimes hire private contractors to do work, such as on roads or in maintenance, but that doesn't change the designation of the workplace. That is simply a product of outsourcing work to private vendors.

The Private Workplace Sector

The private workplace sector, on the other hand, are businesses and organizations financed and controlled by individuals or private companies. Consider this: When you enter a shopping mall or visit a local store owned by family friends, you are contributing to the private sector. Your dollars help support the business and its owners, as opposed to funding public services.

The private sector is also an important part of a country's economy, but these businesses are primarily focused on growing their brand and turning a profit, unlike public sector workplaces where the focus is on providing services to people. Still, in countries like the United States, private sector workplaces make up the bulk of the economy. Privately-held businesses and companies are still prevalent in other parts of the world, but undergo more regulation and restriction from the government. China is a good example of a country where private sector workplaces exist but make up a smaller portion of the overall economy.

As a side note, it is possible for businesses to move from one category to the other. These transitions are known as privatization, where a public business becomes privately-run (such as student loan provider Sallie Mae), and nationalization, where private businesses become public (such as airport security through the Transportation Security Administration after September 11, 2001).

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