Why? States and localities have less revenue to pay salaries and wages. State revenue remains 12 percent below pre-recession levels.
The cuts have been widespread. Since state and local employment peaked in August 2008, payrolls have shrunk by 397,000 (see graph below). This includes:
Local school districts have cut 205,000 education jobs.
Cities, counties, and other local governments have cut 172,000 jobs.
State governments — excluding education jobs at state colleges and universities, which operate autonomously — have cut 76,000 jobs.
Meanwhile, the number of people that states and localities serve has continued to increase. There are an estimated 741,000 more students in public schools than when the recession began. Medicaid enrollment has grown by more than 6 million people, as large numbers of workers have been laid off and lost their job-based health coverage. The numbers of senior citizens, young children, and the unemployed — three groups that tend to use more public services — have also grown.
Over the longer term, as well, state and local government employment is shrinking as a share of the population:
The share of the U.S. population working for states and localities peaked in 2002 and has since declined from about 65 workers per 1,000 population to about 62.
Outside of education, the state and local government workforce, relative to population, is at its lowest level since the late 1980s.
Beyond the job cuts, state and local workers in nearly every state have experienced cuts in pay (often in the form of involuntary furloughs) and benefits.
Continuing state budget woes suggest that the public-sector workforce will likely experience more cuts over the next year or more. And, given the labor-intensive nature of most government services (teaching, policing, firefighting, health care, and the like), it’s hard to see how these workers can continue to be cut without seriously harming the quality of life of the communities they serve.