Comparison Between Government and Private Sector Job Markets!
State and local governments have expanded their payrolls and added 110,000 jobs whereas the private sector has cut 6.9 million jobs since the start of the recession, according to a report issued Thursday by the Nelson A. Rockefeller Institute of Government.
This report was based on an analysis of federal jobs data, found out that state and local governments steadily added jobs for eight months after the recession started in December 2007, with their employment peaking last August. They have since lost 55,000 jobs, but from the commencement of the recession till last month they added a net of 110,000 jobs, the report revealed, partially due to the federal stimulus program.
Government jobs are always more stable as compared to the private sector jobs during downturns, but their ability to acclimate the current deep recession startled Donald J. Boyd, the senior fellow at the institute who wrote the report.
“I am a little surprised at the fact that state and local government has remained as stable as it has in the nation as a whole, given the depth of the current recession,” Mr. Boyd stated in an interview. The report suggested several possible explanations for the difference between the private and public sectors. It noted that there can be a short lag between an economic downturn and the time it hits states in the form of lower tax collections, and an even longer delay before the problems hit local governments in the form of reduced state aid and lower property tax collections.
It pointed to the slow moving of decision-making in many states, and the power yielded by politically influential unions. On the contrary, it also noted that the demand for many government services increases in a recession, and stated that billions of dollars of federal stimulus money sent to states assisted them avert layoffs.
The expansion, coming as many states and localities are raising taxes, troubled Tad DeHaven, a budget analyst for the Cato Institute, a libertarian research group in Washington. “That is disturbing,” Mr. DeHaven stated. “Basically what you have is your producers in society losing their jobs and looking for work, and their tax burden isn’t necessarily going down — and as a matter of fact they are likely to face tax increases going forward — and government growing.”
States are likely to shed more jobs this year. Many have already inflicted furloughs on their workers, reducing their pay, and with states facing record decrease in tax collections, several are planning to cut their work forces. The report noted that some hard-hit states had already made deep cuts, led by Arizona, which shed its state government employment by 8.6 percent starting from the spring of 2008 to this spring.
The difference between the public and private sector job market is hitting in places like Boise, Idaho. Since the recession initiated, the area’s unemployment rate has more than doubled, to over 10.1 percent in June, as big employers, especially in the technology sector, laid off workers. The Boise area only, lost 20,000 jobs in the year ending in June, the Idaho Labour Department stated, and noticed real additions only in government, which had an increase of 1,400 jobs, majorly in the public schools.
Jon Hanian, a spokesman for Gov. C. L. Otter, a Republican in his first term, said employment in state government other than education were declining. The new state budget, which took effect last month, cuts agencies across the board by 5 percent, Mr. Hanian stated, but let these agencies decide whether to inflict furloughs, cut wages or terminate positions.
Kerry Korpi, the director of the research and collective bargaining department at the American Federation of State, County and Municipal Employees, a union representing government employees, said the public sector often dawdled behind the economy in both downturns and recoveries. Ms. Korpi said that an increasing number of government jobs were being terminated now, and that many government workers had been coerced to take pay cuts and pay more for benefits. And she noted that government workers were providing services that are required in a downturn.
“At a time like this,” she said, “it’s really hard to lay people off at your unemployment office or your food stamp office, where they’re having trouble keeping up with what they’ve got.”
The Center on Budget and Policy Priorities, a liberal research group in Washington, recently reported that 30 states had increased taxes since January, and that at least 40 states were furloughing workers or terminating jobs through attrition or layoffs. Many are cutting vital services, the center said.
“Crunch time is still to come for the states,” stated Jon Shure, the deputy director of the center’s state fiscal project.
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