Public vs. Private Sector Cuts: A State-by-State Breakdown

While most governments have made cuts, some states have added public sector jobs since the start of the recession.
by | June 4, 2012

Nearly all states coped with sizable private sector job losses during the recession along with now-sluggish growth. How these private sector cuts have carried over to the public sector, though, has varied greatly across the country.

While public payrolls generally downsized in recent years, a Governing analysis of Labor Department data finds state and local government reductions being applied unevenly so far, with employment growing or remaining roughly unchanged in about half of states since the start of the recession. Private sector employment, by contrast, increased in only five states.

The state-by-state Current Employment Statistics data, shown below, measures employment for all non-federal public employees, including those working in schools.

For the most part, public and private sector employment is positively correlated, particularly among states experiencing drastic cuts in the private sector. It’s no surprise that Nevada – home to the nation’s highest unemployment rate – has slashed public payrolls by 9 percent, the most of any state.

But Labor Department estimates also suggest numbers of public employees actually grew in some states, even those with notable drops in private employment.

Since the start of the recession, combined state and local employment rose more than 10,000 in Tennessee, Utah, Colorado and Oklahoma.

So what’s to explain the discrepancy?

Randy Albelda, economics professor at University of Massachusetts-Boston, said American Recovery and Reinvestment Act funds likely helped states stave off staff reductions.

“This is the first recession in the post-World War II period where the federal government really stepped in and gave money to the states,” she said. “Compared to what usually happens for states and localities during a recession, this was totally different.”

Government cuts historically lag private sector job losses, and this was further extended by injection of the federal funds. ARRA money is now depleted, though. State and local payrolls shed an estimated 220,000 jobs last year alone, and governments have continued to cut jobs in recent months, according to Labor Department data.

Typically, agencies first eye program cuts to trim budgets. The point at which governments lay off workers – a last resort for managers – can vary, Albelda said.

What’s more, states operate on different economic cycles. Although the recession officially began in December 2007, many states didn’t bottom out until a couple years later.

Some citizens may clamor for public sector layoffs as their own employers reduce staffing levels. But Albelda argues businesses need the public sector in order to thrive. Many employers can’t afford to fully pay for rising health care costs, for example, and schools must be adequately staffed for a well-trained workforce.

“When you’re cutting public employment, you’re really cutting your social and human infrastructure,” she said.

Wyoming state government employment expanded 13 percent since January 2008 – the highest percentage increase in the country, according to Labor Department data. The state’s small total workforce explains part of why the increase was so significant, despite only adding an estimated 2,000 jobs.

However, Tom Gallagher, manager of research and planning for the state Department of Workforce Services, told Governing he disputes the figures. The state’s own numbers, based on unemployment insurance quarterly tax filings, indicated a much smaller increase of approximately 700 jobs through March. Wyoming is one of only two states from which the Labor Department does not obtain state employee data, Gallagher said.

Utah, West Virginia and Arkansas recorded the next-highest percentage gains in combined state and local employment since 2008.

It’s important to note that teachers and others working in education are included in the Labor Department’s Current Employment Statistics survey. These employees can significantly sway the totals because they generally account for at least half the public workforce.

Colorado’s total state public employee workforce, for instance, ballooned nearly 12 percent.

The state Department of Personnel and Administration reports the number of paycheck recipients grew less than 3 percent for executive branch agencies through January. The increase was much higher – 15 percent -- for higher education.

A boost in education employment could explain part of the higher numbers in a few states, said Jeffrey Keefe, an associate professor at the Rutgers School of Management and Labor Relations.

New developments taking root in communities, such as energy sector expansion, also require teachers, public safety officers and other additions to public payrolls, he said.

While tea party activists call for government employment reductions, public officials are responding more to budgetary constraints than politics as they weigh how to trim expenses, Keefe said.

Teachers and public safety employees account for the bulk of the public workforce, and eliminating these positions isn't particularly appealing to officials when they're forced to make cuts.

“There’s a lot more ideological noise than there is practical desire to do this,” Keefe said.

Data

Seasonally-adjusted changes in local government, state government and private employment from January 2008 to April:

NOTE: Labor Department data is seasonally adjusted. Seasonally-adjusted government employment data was unavailable for Mississippi, so the state's non-seasonally-adjusted data for January 2008 and January 2012 is shown instead.

Public vs. Private Sector Employment

The following scatter plot illustrates percentage change in employment since January 2008. North Dakota is not shown.

Join the Discussion

After you comment, click Post. You can enter an anonymous Display Name or connect to a social profile.

More from By the Numbers