Has The Public Sector Jobs Recovery Stalled?
Despite strong revenue growth of cities and states, public sector employment recovery is lagging.
The recovery of state and local government (SLG) employment, particularly non-education, appears to have stalled. In September, we commented on the divergence between SLG employment and broader nonfarm jobs data. Five months later, things have started to improve, but remain slow.
Across the country, stories about governments, schools, and transportation agencies with difficultly recruiting workers abound. Whether it’s the Great Resignation, increasing retirements, looking for better pay, or burnout — the SLG jobs recovery has been slower than the rest of nonfarm employment.
But the sector is also not immune to broader issues. In a tight labor market everyone is competing for workers -- bus drivers can earn more driving delivery trucks, schools nurses can earn more on a contract basis, and wage earners can make significantly more per hour in the private sector. As result, a number of cities and states have been offering incentives and boosting pay as part of their budget proposals; but will it be enough?
This week’s digest looks at the continuing slow recovery of public sector employment.
What’s Contributing to the Slow Recovery?
A Very Good Read — After five years in local government, an individual discusses their difficult decision to leave their job.
“The job ads for municipal roles sounded old-fashioned and tiresome, not at all exciting or contemporary. Yet as I branched out and looked at private sector roles, I found hundreds that checked my boxes.”
Report: Burnout is on the rise amid “great resignation” American City and County
MEA Members Share Reasons Behind Educator Shortages Michigan Education Association
How is the Public Sector Managing the Shortfall?
Nontraditional hiring practices and cooperative buys can help procurement teams reduce backlogs American City and County
Problems May Get Worse
To emphasize how some of the broader labor market issues are affecting the public sector, check out Bloomberg’s “Odd Lots” podcast on school bus drivers and their interview with the Executive Vice President of the Logan Bus Company — the largest school bus contractor in the NYC area.
CHART OF THE WEEK
Looking at the latest BLS data through February 2022, total nonfarm employment (excluding SLG) continues to recovery rapidly to its pre-recession level. Some state unemployment levels are already lower than where they were February 2020. But while private sector payrolls improve, employment in public sector is slow or stalled.
A bright spot is SLG education employment, down only 3.1% from it’s peak. However, non-education SLG employment is down 3.8% in February and has averaged down 3.7% for the past 12 months.
But this is not due to a lack of job offerings — governments want to hire. In January, SLGs had 922 thousand openings, a level that has steadily risen over the past year. The Great Resignation, or whatever you prefer to call it, has come for the public sector along with broader factors affecting the labor market. Stories about public health workers coming under attack, politicization of school curriculum, and the pressures of being on the front-lines of the pandemic haven’t helped.
Looking at the growth of SLG job openings since 2010, the public sector has a bigger problem: a consistent issue filling vacancies.
It is a critically important time to get more workers to enter the public sector. While an influx of federal aid helped to prevent steeper losses of SLG jobs, it’s not having the effect of rapidly bringing workers into government. Public sector retirements are up and more employees are considering leaving their jobs. Incentive programs and higher pay are a great start, but the country needs to work on reenergizing individuals to join the public sector workforce.
Exodus of Employees is Increasing Strain on Public Sector Workforce Mission Square Institute
The Issue: More people are leaving their government jobs voluntarily since the start of the pandemic, placing a burden on the workload of others.
Employees feel their employers can take concrete actions to help with recruitment and retention – from bumping up salaries and offering bonuses to recognizing employees for the important public services they are delivering.
Any opinions expressed herein are those of the author and the author alone.