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- GUEST BLOG: Public Sector Jobs Deficit
Tuesday, March 25, 2014
By Brooks Kirchgassner: Brooks is a Legislative Assistant with the Institute and an Associate Faculty member in the Department of Political Science at IUPUI.
Following legislation allowing Indiana counties the option to eliminate the business personal property tax (without providing replacement revenue), accompanied by another round of corporate income tax cuts, even more of the burden of funding critical government services will inherently be shifted towards middle - and low- income families, while local governments are expected to continue to struggle to meet infrastructure and service needs - arguably just as critical to growth as minimizing business costs. Here's a look at the employment picture:
Currently, state and local government employment is down 2.5% since its peak in July 2008. As of January 2014, there were 383,500 jobs in this sector. That's 26,200 fewer than there were during the peak of state and local government employment in July of 2008. Add that to the 19,600 jobs needed to keep up with an average population growth of 4.3% since the job-peak for a total state and local government jobs deficit of 45,800 (Figure A). The total non-farm jobs deficit is 174,700 - that's 32,000 less total jobs since the recession began, plus 142,700 to keep up with an average population growth of 4.3% during the same time period.
You can explore some of the trends yourself with this interactive from Governing magazine on state government employment trends - illustrating notable declines in corrections, financial administration, hospital staff, and highway positions since the beginning of the recession. And because education employment “accounts for such a large share of public employment", here is a state-by-state map displaying "percentage changes in non-education full-time equivalent employment from 2007 to 2012". The author notes that “states with stronger economies tended to add more workers” - yet, only New Mexico, Oklahoma and Maine saw greater percent reductions than Indiana’s 10.8% loss.
Public sector job losses and post-recession austerity measures not only have visibly adverse effects on infrastructure, public safety and health investments, the classroom, and other important service and community needs, but also reduce private sector demand, affecting total economic activity.
Figure A - State and Local Government Jobs Deficit
Source: Economic Policy Institute Analysis of Current Employment Statistics and Local Area Unemployment Statistics January 2014