More than a year after the sharpest monthly decline in state and local government employment on record, the return of jobs in much of the public workforce is lagging as the economy recovers from the pandemic-induced recession. Although the private sector and hard-hit public school systems are now regaining lost positions, employment growth in state and local government outside of schools has withered.
The number of noneducation state and local jobs, which make up about half of the public sector and include workers in areas ranging from city parks and city halls to police forces and correctional facilities, is down by more than 400,000 since the pandemic struck, according to the latest federal Labor Department estimates for August. The current total is about equal to the low point after the Great Recession. Surprisingly, employment in this sector has dipped slightly even as the recovery lengthens, down 0.6% since December.
By comparison, private employment is up 3.4% since that month, though still not fully recovered from its losses since the pandemic struck earlier in 2020. Local school and state higher education jobs have also climbed recently after initially experiencing steep losses but are still below pre-pandemic levels.
Among noneducation jobs, the greatest reductions since the pandemic began have been in local governments, which employ more than twice as many workers as states do. As of August, local public payrolls were down 5.3% from pre-pandemic totals, more than 350,000 jobs, excluding education positions. After weathering the early months of the pandemic with relatively small losses, state government employment—also excluding education—has declined slowly every month this year, with the total down 2.1% from pre-pandemic levels, or about 57,000 jobs.
Multiple factors have held back the recovery of these jobs. Temporary layoffs persist as many cities and states are still ramping up services that were scaled back to prevent the spread of COVID-19. In addition, budget pressures that led to hiring freezes or furloughs earlier in the pandemic remain in place in some jurisdictions. At the same time, more workers are leaving government, including retirements, causing managers to scramble to hire for hard-to-fill positions.
The lagging recovery of state and local jobs matters beyond the bank accounts of those previously on the public payroll. Reduced public employment—if it persists over a lengthy recovery—could harm government services and hinder broader economic growth.
