Labor and Employment

The Great Recession has had an unprecedented effect on state and local government employment and will continue to affect levels of employment in the coming years. John Lonski, chief economist for Moody's Capital Markets Research, told Reuters, “We are looking at the worst contraction of state and local government employment since 1981.” The loss of stimulus funds will exacerbate the downward trend in public employment, especially in education. 

A Michigan law that reduced the pay of current state workers to offset the state’s retiree health care costs has been ruled unconstitutional.

In July, Connecticut became the first state in the nation to require certain businesses to offer paid sick leave to their employees.  At the time, only Washington, D.C. and San Francisco had such laws.  Earlier this week, the Seattle City Council approved similar legislation, sending it to Mayor Mike McGinn for his approval, which is expected. 

U.S. Census Bureau figures released this week reveal that poverty levels were on the rise in 2010, with the percentage of Americans living in poverty at its highest point in 17 years.  Poverty rates range from a low of 6.6 percent in New Hampshire to a high of 22.7 percent in Mississippi.  Over the past 10 years the poverty rate increased in all but three states.  

One week after the President unveiled the American Jobs Act, House Speaker John Boehner delivered an address before the Economic Club of Washington outlining the GOP’s Plan for America’s Job Creators.  While the President’s $450 billion plan relies on a 60/40 mix of tax measures and new spending to stimulate job growth, Speaker Boehner’s proposal rejects short-term spending in favor of a three-pronged agenda of long-term tax reform, deregulation, and reduced government spending. 

President Obama’s 155-page jobs proposal landed on Capitol Hill this week and both parties are rallying their troops for a partisan fight.  Prospects for adoption remain low and support among state leaders will likely divide along party lines.  However, the bill does contain $30 billion in state fiscal relief, in the form of the Teacher Stabilization Fund, which if enacted would have a direct impact on state budget decisions throughout the country.

The White House is conducting a conference call at 4:30 ET today, Friday, September 9 to provide additional details on the provisions of the American Jobs Act. In addition, the White House is conducting several state-specific conference calls today and on Monday on the provisions of the American Jobs Act.  

Leaders of the nation’s largest state and local associations were summoned to the White House this morning to hear a preview of the President’s forthcoming jobs address from Danielle Gray, Deputy Director of the National Economic Council, and Cecilia Muñoz, White House Director of Intergovernmental Affairs.  While the administration is trying to keep a close hold on details in advance of the speech, it is clear that the President will propose both a continuation of existing programs and new initiatives across three major policy areas: taxes, infrastructure, and unemployment assistance.

According to new data from the Census Bureau's Annual Survey of Public Employment and Payroll, state and local governments lost 203,321 jobs last year. John Lonski, chief economist for Moody's Capital Markets Research told Reuters that “we are looking at the worst contraction of state and local government employment since 1981.”

According to reports released today by the Bureau of Economic Analysis, national personal income increased by $42.4 billion – or 0.3% - in July compared to June. Personal consumption also went up in July, increasing by 0.8%. Growth rates in July were similar to those in June, when personal income increased $27.7 billion, or 0.2%, and personal consumption was up 0.1%.  Personal income was up 5% over July 2010.