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For State and Local Workforce, the Recession’s Still On

Teachers, nurses, police officers, and others who work for state and local governments are still suffering from the impact of the recession.

School districts, counties, and cities cut 15,000 jobs in March, the Bureau of Labor Statistics reported today.  The state government workforce held steady in March but is still well below its pre-recession level.  March was the 25th out of the last 31 months that total state and local employment shrank.

Why?  Because of the long and deep recession, states and localities have less revenue to pay salaries and wages.  State revenue remains 11 percent below pre-recession levels.

The job cuts have been widespread.  Since state and local employment peaked in August 2008, payrolls have shrunk by 497,000 (see graph).  For example:

  • Local school districts have cut 196,000 education jobs.
  • Cities, counties, and other local governments have cut 211,000 jobs.
  • State governments have cut 90,000 jobs.


Meanwhile, the number of people that states and localities serve has continued to rise.  Medicaid enrollment has grown by 7.6 million people, as large numbers of workers have lost their jobs and their job-based health coverage.  There are an estimated 741,000 more public school students than when the recession began.  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 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 is at its lowest level since the late 1980s as a share of the population.

Continuing state budget woes suggest that the public sector will experience more job losses over the next year or more.  At least 15 states have proposed more layoffs or compensation cuts for public employees in the coming fiscal year.

And, given the labor-intensive nature of most government services — teaching, policing, firefighting, and the like — it’s hard to see how governments can continue to cut these workers without seriously harming the quality of life of the communities they serve.