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Needed: Federal Aid to Reverse Deep Public-Sector Job Cuts, Including in Education

The harsh recession and deep state budget crisis triggered by COVID-19 are causing sizable public-sector job losses, especially in K-12 and higher education, the latest jobs data show. More large, flexible federal fiscal aid — which stalled in Congress even as the crisis intensified — is needed to reverse as many of these losses as possible and prevent new ones.

As of August, about 1.1 million public-sector workers had lost their jobs since February, an estimated 668,000 (59 percent) of them in education. About 462,000 of the lost education jobs were in K-12 schools, with most of the rest in colleges and universities. These losses dovetail with ongoing weakness in the national labor market as a whole, as we explained last week, and are also much sharper than normal summer drop-offs in educational employment.

With state and local tax revenues plummeting as large parts of the economy shut down, state and local policymakers began almost immediately to slash their workforces to cut costs, issuing widespread furloughs and layoffs as well as freezing hiring and pay raises. In April alone, public-sector job losses exceeded those of the entire Great Recession of a decade ago and its aftermath.

This initial cuts in the spring fell hard on educational workers. Massachusetts school districts sent layoff or nonrenewal notices to more than 2,000 educators (the vast majority of them teachers, according to the Massachusetts Teachers Association); Minnesota school districts sent home hundreds of educators and assistants, especially those running after-school care and extracurricular activities; and New York City furloughed about 14,000 school bus drivers and related workers. Half of the lost K-12 jobs in March and April were among special education teachers, tutors, and teaching assistants, according to the Economic Policy Institute; large losses also occurred among counselors, nurses, janitors, and maintenance workers. Furloughs in higher education were widespread in the spring as well, such as at places like Ohio University and colleges across Oregon.

Public-sector job losses, including in education, grew rapidly and remained high throughout the summer. To be sure, some staffing reductions in education would have occurred even in normal times, as local districts and institutions of higher learning routinely reduce hours or furlough certain support workers — such as counselors and bus drivers — over the summer. But the scope of the job loss this year was huge — far beyond any normal seasonal variation. As of August, nearly 700,000 fewer people were working in state and local education nationwide than in the same month last year (see chart).

Some workers furloughed in the spring have been called back, but it will take another month or two of data to get a clearer sense of the full effect, and educational jobs will likely remain way down for two reasons.

First, many states and localities have already cut K-12 spending — by more than $500 million in Colorado and nearly $1 billion in Georgia, for example. States such as Maryland, Missouri, and Nevada have cut college and university funding as well. These cuts translate into fewer teachers, instructional aides, and support staff.

Second, most school districts are operating this fall in a partial or entirely virtual environment, which has reduced the need for people like cafeteria workers or bus drivers but imposed costs in other areas, such as technology. Furloughing those workers may be helping districts avoid deeper cuts in other areas right now but, when districts call them back, they’ll face renewed pressure to cut elsewhere — such as by reducing teacher positions or cutting enrichment activities — unless more federal aid is forthcoming.

The scope of the permanent job losses in education will depend, in large part, on pending policy choices by federal and state lawmakers. States face an estimated $555 billion in revenue shortfalls through 2022, and those projected shortfalls still total nearly $400 billion after accounting for flexible federal aid to date and states’ own reserve funds. In response, states and localities are increasingly slashing funding for vital public services. Some states and localities have managed to limit or delay cuts to K-12 and higher education thus far, but that’s likely unsustainable since education and health care account for more than half of state and local spending nationwide.

More states will be revisiting their spending plans in the coming months and into next year, when they will face enormous pressure to make further deep spending cuts, especially absent further federal help. If the Great Recession is any guide, job losses in public education will remain substantial, and their fallout will linger for years. When COVID-19 hit, K-12 schools employed 77,000 fewer teachers and support workers than before the Great Recession, despite teaching 1.5 million more children.

These are among the many reasons why federal policymakers need urgently to enact another sizable round of state and local fiscal aid, including aid for schools, a further increase in the federal share of Medicaid, and flexible, direct grants. The “skinny” relief plan that Senate Majority Leader Mitch McConnell unveiled this week is highly inadequate in this regard. The nation still needs a comprehensive, bipartisan agreement to protect the economy and prevent the ongoing state fiscal crisis — including its impact on education — from spiraling further out of control.