State and Local Governments Drop Nearly a Half Million Jobs in Two Years

According to new data from the U.S. Census Bureau's Annual Survey of Public Employment and Payroll, state and local governments shed a total of 441,545 full-time equivalent (FTE) positions from 2009 to 2011. The number of employees in state and local governments has been declining since 2008 and represents the largest contraction of public employment in more than 30 years. In addition, state and local governments are increasingly relying on part-time labor.


Across all states, from 2009 to 2011, state and local government FTE employment shrunk by 2.6 percent, representing over 441,000 jobs. While in the aggregate state government employment has decreased, some states have grown offsetting those that have shrunk. State and local government employment in 34 states decreased from 2009 to 2011, representing a total FTE loss of over 513,000 positions. Nationally, those losses are offset by increases in the remaining 16 states which collectively increased employment by over 74,000 FTE positions.

Over half of all FTE positions lost from 2009 to 2011 were due to losses in five states: Arizona, California, Illinois, New Jersey and New York. California and New York together shed almost 174,000 positions in two years. As a percentage of total workforce, Arizona contracted the most significantly, losing 9.4 percent of state and local FTE employees. Massachusetts and New York follow Arizona, each decreasing by more than 6 percent.

Of the 16 states that grew employment over this period, two states – Arkansas and Texas – make up 58 percent of job gains, each growing by over 20,000 FTE positions. Nine of the 16 states that grew did so by less than 2,000 positions. Arkansas, as a percentage of total workforce, grew at a pace nearly double that of next closest state, increasing employment by 11.9 percent in two years. North Dakota comes in second, with a growth rate of 6.2 percent followed by Utah at 4.7 percent.  

Percent Change in State and Local FTE Employment, 2009-2011

Source: Author’s Calculations of U.S. Census Bureau's Annual Survey of Public Employment and Payroll

The Shift to Part-Time

Although the number of state and local employees is shrinking, the demand for government services is not. Populations continue to grow and the recession has placed more families than ever in precarious financial situations, leading them to rely increasingly on government assistance – from workforce training programs to unemployment insurance. In the face of decreasing or stagnant revenues, state and local governments are reacting like the private sector might: decreasing overall employment while shifting a larger percentage of the workforce to part-time hours, which is generally less expensive. From 2010 to 2011, the number of full-time state and local employees decreased by over 209,000 while the number of part-time employees actually increased by nearly 23,000.