New employment data show that while private employment fully recovered more than a year ago, state and local public employment remains below its pre-pandemic peak.
Overall, total employment in state and local governments remains 0.1 percent lower than March 2020, but not all government jobs are following the same trajectory. State-level education sector employment is exceeding pre-pandemic totals, while state non-education employment has not fully recovered. A similar split exists at the local level. Local education jobs are 0.4 percent below March 2020 levels, while local non-education jobs are down 1.7 percent since the pandemic.
Education sector employees account for 52 percent of all state-level public employees and 46 percent of local public employees. However, the local government sector is nearly three times larger than the state sector: 14.5 million employees versus 5.2 million. Local government employment also experienced a steeper decline during the pandemic. The local government workforce shrank by 9 percent between March and May 2020, while state-level employment only declined by 4 percent.
View state and local government employment data by state.
If the lag in state and local public employment sounds familiar, it’s because the recovery was rather slow after the Great Recession. Public sector jobs did not fully recover from that crisis until 2019. Slow economic growth limited tax revenues and thus hampered efforts to rehire public officials. In fact, state and local government budgets were so constrained that public employment was a problem. A drag on economic growth From 2009 to 2014.
COVID-19 caused an even bigger crisis most severe drop in employmentState and local governments, anticipating significant budget deficits in the early months of the pandemic, Suspended and fired employees. State and local employees also They left their jobs as the pandemic affected workers’ willingness to work in person and for less competitive wages than in the private sector.
The economic recovery from the pandemic has been rapid in the private sector, partly due to the possibilities of remote work, More flexible and more generous stimulus from the federal government and better-than-expected revenues. As a result, state tax collections flourished and local revenue growth was strong (if not stronger) complicated). From March 2020 through April 2023, state and local governments Contributed positively on real GDP growth on average, even without a recovery of full employment.
So if state and local governments aren’t slowing the economy, why does it matter that public sector jobs haven’t fully recovered?
On the one hand, state and local governments will have to play key roles in implementing the infrastructure bill and climate provisions in the Inflation Reduction ActGovernment workers, such as teachers, police, public transit operators, and social workers, are also vital to a full and equitable recovery from the many consequences of the pandemic. And keep in mind that some subsectors of state and local government employment, such as state education and local non-education sectors, have never recovered to their 2008 levels.
Secondly, the recovery of the public sector Varies by stateIn West Virginia, public sector employment remains 6 percent below March 2020 levels. In Delaware, public employment has not only recovered, but has continued to grow, up 4 percent since the start of the pandemic. This could lead to uneven levels of public services across states. In total, 38 states remain below pre-pandemic public employment.
The combination of federal aid and better-than-expected finances for states and local The 2021 and 2022 governments helped stabilize public sector jobs and put employment levels on the path to partial recovery. Many states have also attempted to Combating continuous vacancies increasing employee compensation, with 33 states propose across-the-board wage increases for at least some categories of employees in fiscal year 2024.
But state and local governments may now face more specific barriers to hiring, such as exhaustion, Long hiring processesand wage competition with the private sector. These challenges need to be addressed to rebuild capacity and continue to deliver essential services.
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