State, Local Government Employment Outlook Cloudy
GFOA Newsletter January 15, 2015
The latest jobs report showed relatively strong growth in private-sector employment, but state and local government employment remains lower than the levels reported in December 2007, according to a January 12 Rockefeller Institute of Government data alert. Total U.S. non-farm employment grew by 252,000 jobs in December 2014, compared to November, the Bureau of Labor Statistics reported, but state government employment gained only 7,000 jobs, and local government, just 4,000. According to the institute’s analysis, total non-farm employment rose by 1.4%, or 2 million jobs, since the start of the Great Recession in December 2007, with private-sector employment growing by 2.1% (2.4 million jobs). While private-sector employment has improved substantially, state and local government employment remains below prerecession levels: Employment is down by 1.1% (-54,000 jobs) for state government and by 2.3% (-340,000 jobs) for local government. “State and local government employment is far weaker seven years after the start of the Great Recession than it was seven years after the start of any of the previous four recessions. On average, state and local government employment was up 8.1% seven years after the start of the previous four recessions.” In other words, despite the good news for private sector jobs, the employment outlook remains cloudy for the state and local government sector. As the data alert says, “The Great Recession led to deep cuts in state and local government jobs – much deeper than any other recession in the last five decades.”
County Employment Picture also Gray. According to the National Association of Counties, unemployment has yet to return to pre-recession lows in most county economies. According to the NACO study, economic recovery is starting to spread, but only 65 county economies have fully recovered. Net job creation was greater in 2014 than the previous year, however, with 40% of the new jobs in industries earning more than the average county pay. But at the same time, average county pay in half of county economies declined between 2012 and 2013.
In Nationwide Economy, Jobs Improve but Wages Drop. Although the overall U.S. economy appears to be at its best since 2008, including the job market, wages are not increasing. Total employment rose by 2.95 million for the year, the largest advance since 1999, and the unemployment rate also improved, edging down in December to 5.6% from 5.8% in November. The rate fell by approximately one percentage point between 2013 and 2014, the largest decline since 1984. But average hourly earnings also fell last month. “This is still a buyer’s market in terms of labor,” according to the New York Times