Huge job losses haven’t spread to public sector — yet

Does a government job protect you from recessionary pink slips? Maybe in the short term.

Employment by state and local governments — here in Massachusetts and across the US — has been relatively flat since the start of the national recession, according to a new study by the Rockefeller Institute of Government in New York. The study's author, Donald Boyd, notes that the private sector lost 6.9 million jobs nationally from the beginning of the recession in December 2007 through July 2009, while the public sector added 110,000 jobs.

But Boyd suggests that the bad economy may yet catch up with those on the local-and-state public payroll, which actually peaked in August 2008 and has since shrunk a bit. It's now at about 20 million, or 14.9 percent of all employment in the US.

Boyd also points out that private-sector industries that deliver similar services to that of government — particularly health care, education, and social services — have also had stable or growing employment during the recession. Though that may not entirely be a result of free-market forces:

These private industries tend to be heavily dependent upon government for their financing, so whether their growth reflects the fact that they are difficult to cut, whether in the private or public sector, or reflects a governmental reluctance to cut spending is not easy to answer.

Some other highlights from the report with respect to the Bay State:

  • Private-sector employment in Massachusetts fell by 3.8 percent in the second quarter (compared with the same period in 2008), while the number of state and local jobs fell by 0.5 percent. Private-sector employment fell in 49 states, with North Dakota the only exception (up 0.2 percent) and Michigan suffering the worst (down 8.6 percent). Public-sector employment fell in 16 states (including Massachusetts), with the biggest drop in Rhode Island (down 3.5 percent). The fastest-growing public sector is in Utah (up 3.7 percent), presumably more because of population gains than because of any leftward political shift.
  • Overall, there wasn't much difference between and the state government and local governments in Massachusetts: The state workforce fell by 0.6 percent, and local workforces fell by 0.4 percent. In New Hampshire, by contrast, state jobs dropped by 1.9 percent while local-government jobs actually rose by 3.9 percent.
  • But there was a noticeable difference between state-and-local employees working in education (or about 54 percent of the workforce) and in other areas. At the state level in Massachusetts, education employment rose by 2.0 percent in the second quarter of 2009 even as employment for all other state workers fell by 2.1 percent. At the local level in Massachusetts, education employment fell by 0.3 percent, but all other employment fell by 0.6 percent.
This difference is not limited to Massachusetts. As Boyd writes about the national picture:

Public education — particularly elementary and secondary education — traditionally has substantial support from voters, taxpayers, and politically influential employee unions, and has been an area of dramatic long-term spending growth. While states have cut aid to local school districts during budget crises, the cuts usually are less-pronounced than in other areas of the budget, presumably as a result of this political support.