State and local hiring has not recovered

Two prominent media outlets, USA Today and, have recently run stories that trumpet increased state and local government hiring. But both outlets make crucial errors in their calculations.

Let’s start with USA Today‘s story from June 27. Its analysis used the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey to claim that 800,000-plus new jobs had been created in muniland. But this number is a “turnover” number and not surprising since the sector employs over 19 million people.

Today ran a story that riffed on what USA Today reported and made this further claim:

More public workers were hired in the first four months of 2012 than any other year period since 2008. The 828,000 new hires are filling positions that were left open to save money during the recession. The hiring boost indicates that state budget problems have relaxed and that public-sector job growth could be imminent. It takes at least six months for a hiring boost to create a larger workforce, according to the newspaper.

In fact when you total up state and local government hires for the first four months of 2012, there were 1,084,000 new employees filling positions. But these are not new positions that have increased the overall level of state and local employment. These are hires replacing employees who left current positions. Total state and local employment is actually down year-over-year, from 19.3 million in May 2011 to 19.2 million in May 2012.

Are teachers a protected class?

State and local employees have not been as hard hit as the general economy. At 19 million strong, this workforce comprises about 14.6 percent of total U.S. non-farm employment. It looks as if education workers are particularly being shielded from job cuts.

Chris Mauro, Head of U.S. Municipals Strategy at RBC Capital Markets wrote today in a privately circulated research note (emphasis mine):

[O]n a percentage basis, the state general government (non-education) sector has seen the largest decline in employment since December 2007. As of October 2011, it is down almost 6% from its recent peak.

The Connecticut business laboratory

Connecticut Governor Dannel Malloy is not waiting for the U.S. Congress to pass jobs legislation. Rather, he is moving on his own to get growth happening in his state. Although Connecticut’s output is running on par with national trends he has sent a package of growth proposals to the legislature. It’s an interesting blend of tax cuts, targeted programs for small business and skill upgrades for employees in the manufacturing sector. The Connecticut Mirror recently described the highlights:

$516 million in bonding for business and infrastructure investments, a new tax break aimed at small businesses, and a plan to streamline state regulations.

The single-largest investment in the plan involves adding $340 million to the Manufacturers’ Assistance Account, which provides various low-interest loans and grants to businesses.

Part-time employment up in muniland

Incredible shrinking workforces

I’ve read in a few places that state and local governments were reducing the number of full-time employees and hiring more part-time workers. There is a story in the Dayton Daily News that nicely details the trend:

The data show that both the state and local Ohio governments attempted to get the work done by hiring more part-time employees. While local governments shed a little more than 11,000 full-time employees, they added almost 6,000 part-timers, a 4.6 percent increase. The state, meanwhile chopped close to 1,400 full-time workers and added 386 part-timers, a half-percent increase, according to Census data.

Ohio’s government job-shedding put it in the top third of the 50 states, although margins of error from the Census survey data make exact rankings impossible.

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