State Government Employment Hits 8-Year Low

U.S. Labor Department estimates released Friday indicate state government employment has reached the lowest levels since May 2005.
by | August 2, 2013 AT 6:00 PM

Slow, steady cuts to state government payrolls have continued to pile up in recent months, with no signs of employment trending up.

Preliminary Labor Department estimates released Friday pegged total state government employment at 5,025,000 workers, the lowest tally since May 2005.

State government employment has declined slightly each of the past four months (see chart below), with totals for July fluctuating little. Recent cuts pale in comparison, though, to what states incurred back in 2011 as budgets across the country were trimmed in response to revenue shortfalls.

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State governments reached a peak of about 5.2 million workers in the fall of 2008. Since then, public education jobs at the state level – which account for about half of the sector’s employment – haven’t shifted much. But while education employment is about on par with pre-recession totals, all other areas of state government shed a combined 180,000 jobs from the 2008 peak.

The following chart shows changes in state government employment, including education, since 2005:

State agencies in Louisiana have suffered some of the steepest casualties recently. A report by the state Civil Service Commission found more workers were laid off during the past fiscal year than the previous four years combined, mostly due to hospital cuts.

By contrast, local government employment appears to have stabilized, with payrolls hovering around the same levels over the past 24 months.

Local schools and governments have added an estimated 46,000 positions so far this year, with both education and non-education employment recording similarly small growth.

In all, the new jobs report estimated the economy added 162,000 total jobs in July, a figure below most expectations. Growth in the retail trade, food services, finance and wholesale trade industries accounted for some of the largest gains.

The national unemployment rate declined to 7.4 percent, the lowest mark since December 2008. The employment-to-population ratio held steady at 58.7 percent, moving little over the past year.

Here’s an updated chart showing monthly changes in total state and local government employment: