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State & Local Government Employment Recovery
While overall employment recovers, state and local government hiring remains in a rut; so what's going on?
The September jobs report showed nonfarm payroll employment rose by 194,000 for the month and the unemployment rate fell to 4.8%. However, state and local education jobs unexpectedly decreased.
Public schools often buoy the September jobs report as districts rehire teachers, bus drivers, and administrators; but in September, hiring in the sector was a drag on overall results. Elise Gould with EPI looked at the numbers in more detail and found that public education employment did rise with the re-opening of schools, but the increase was not large enough to offset the seasonal adjustment.
State and local governments, like most sectors, are having difficulty filling positions. In the public education sector, those employed as bus drivers, food service workers, or substitute teachers are often low-wage and part-time — and are caught up in the same issues facing the broader labor market.
Bus Driver Shortage A National Problem
Lack of bus service prompts remote learning day for MSD Pike Township Fox 59 - Indianapolis
State and Local Governments Offer Hiring Incentives
Government Service Interruptions
Washington State Ferries to cut sailings on some routes by half The Seattle Times
The worker shortages plaguing the public sector City and State New York
Subway Trips Canceled Over Staff Shortages Soar to a Pandemic High The City (July 2021)
CHART OF THE WEEK
This week’s chart looks at the recovery of state and local government (SLG) employment, SLG education employment, and how that compares to overall employment recovery.
Looking at the Great Recession total nonfarm payrolls, less SLG employment, took about 6 years to recovery, albeit it they also started to decline later than other jobs at the onset of the 2008 recession.
It took nearly 6 years for a recovery in SLG education and nearly 10 years for recovery in SLG non-education employment from their peaks. Worsening SLG employment this recession is that it’s only a few months after their last jobs recovery and technological change is fundamentally altering the education sector.
Why This Matters:
The depth of the loss in government employment affects essential services: education, healthcare, transit, etc. have been interrupted across the country.
Looking at the last recession, government payrolls were slow to recover and lagged the overall nonfarm jobs recovery — this time around government service disruptions are likely to drag on longer.
Governments operate pretty lean. Hiring incentives and other jobs programs need to be budgeted for and while stimulus funds may offer temporary assistance, they are not a long-term solution.
U.S. Labor Department said 4.3 million people quit their jobs in August, a series high since its start in December 2000.
What Are People Saying:
In 2009, 44 percent of respondents said that retirement-eligible staff were planning to postpone retirement, but in 2021 only 2 percent said this. In 2021, 38 percent said retirement-eligible staff were planning to accelerate retirement, compared to 12 percent in 2009.
Workers who are sidelined, whether by layoffs, disability, or school closures, may find it difficult or impossible to reenter the job market as their skills lapse. One troubling indicator: The number of Americans unemployed for at least a year reached 2.9 million in June, which is equal to about 29% of all the jobless.
The Issue: Despair in society is a barrier to reviving our labor markets and productivity, jeopardizing our well-being and longevity. Policy responses have been fragmented, with most focus on drug interdiction rather than on the root cause of despair.
Unless our society’s well-being—including mental health—becomes a national priority, we are unlikely to achieve a complete recovery from the COVID-19 shock. The many local initiatives we have are essentially operating in silos, with little ability to get to a higher scale or to coordinate with other relevant actors elsewhere. And without a federal level commitment to well-being and mental health, the issue is likely to remained sidelined.
Opioids and the Labor Market BLS; Cleveland Fed
The Issue: Does increased opioid use lead to declines in labor market participation?
Generally, areas with higher prescription rates have higher levels of labor force reductions and areas with lower prescription rates have lower reductions. Their data suggest that in counties with the highest prescription rates, resolving the opioid epidemic would increase labor force participation rate for prime-age males by over 4 percentage points.
Any opinions expressed herein are those of the author and the author alone.
(Editor’s Note: This post was corrected on Oct. 19, 2021 to reflect proper labeling of the lines in the chart and corresponding paragraph in the “Chart of the Week”)