State and Local Job Cuts Continue, Especially in Education

Today’s jobs report shows that in August, cuts by states and local governments — especially school districts — wiped out private-sector job gains.

The state and local sector cut 15,000 jobs in August.  That comes on top of a whopping 66,000 jobs lost in July, according to revised figures released today — the worst single month of job loss for states and localities since the recession began in December 2007.  States and localities have eliminated 671,000 jobs since employment peaked in August 2008 (see first graph).

Not coincidentally, July was also the first month of the new fiscal year for most states, one in which they are facing the double-whammy of weak revenues (which remain well below pre-recession levels) and the expiration of temporary federal aid.

Some 14,000 of the state and local jobs lost in August were in local school districts, bringing to 293,000 the total decline in school-district employment since August 2008 (see second graph).

Cuts in state education funding are a big reason behind these education-related job losses.  As we reported yesterday, the vast majority of states for which data are available are cutting basic education grants to local school districts to below pre-recession levels.  Some of the cuts exceed 20 percent.

These troubling numbers raise a disconcerting question:  What kind of an economic future will this country have if we keep cutting education?