EconoMonitor

The Wilder View

Don’t expect government jobs to hold on

Forbes is running an article on jobs in government, Government Jobs You Should Apply For Now. Accordingly, there is a lot of job growth in the federal job market – well, there may be. The Department of Labor is opening positions from Program Analyst to Contract Specialist to General Attorney (Labor). And the April employment report showed a record 72,000 jobs added by the government sector alone, which is massive compared to its +8,000 average over the last year.

However, “government” is federal, state, and local; and the federal payroll accounted for just 13% of all government jobs in April.
govt_jobs_chart.PNG

The chart illustrates job growth at the federal, state, and local levels since 1980 (indexed to 1980). During the 1990 and 2001 recessions, both state and local governments hired throughout the recession. However, this time, they are more likely to fire than hire, where job growth has already slowed to a small crawl.

State jobs are roughly 23% of the government’s workforce, while local governments account for 64% of government jobs. And state budgets are going deeper into the red according to the Wall Street Journal’s Real Time Economics blog:

Revenue declined in 45 of the 47 states that have reported first-quarter numbers (the exceptions were Iowa and South Dakota). Let’s remember that many states consider deficits to be those times when revenues don’t grow as fast as they’d hoped, an have no contingency plans for double-digit decreases. “If green shoots are sprouting in the overall economy, it’s still weeds and dust for state governments,” says Robert Ward, deputy director of the Rockefeller Institute.

state_revenue_chart.PNG
Chart source: Real Time Economics

And amid such budget shortfalls, spending cuts are already underway. As an example (one of the states highlighted in the chart above that is experiencing a 15% drop in revenues over a year ago) is California, which according to the WSJ, is again accommodating the mound of budget red ink by another round of spending cuts:

The possibilities include cutting $3.6 billion from education, reducing the state’s firefighting budget by 10%, and releasing 40,000 low-risk inmates to cut prison costs, Mr. Schwarzenegger said. The state also may have to borrow $2 billion from local governments, he said.

Jobs are certain to be slashed alongside the spending cuts. And unless the feds can offset the job loss at the state and local level, government is not the illustrious job maker portrayed by Forbes. The labor market – all sectors of it – is awful.


Originally published at the News N Economics blog and reproduced here with the author’s permission.

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