State Government Employment Falling

E-newsletter Issue #83 | Dec. 8, 2011

Good news for the economy in November: The U.S. Bureau of Labor Statistics reported last week that the unemployment rate dropped 0.4 percentage points since October--from 9.0 percent to 8.6 percent – the first meaningful month-over-month decline in nearly a year and the lowest the rate has been since March 2009.

Employment grew by 120,000 in November, with the biggest gains made in retail trade, leisure and hospitality, professional and business services, and health care. But the good news didn’t carry over to the public sector, which cut another 20,000 jobs. Of those lost  jobs, 5,000 were in state government, even though states already have shed 62,000 jobs since the beginning of 2011. 

State governments started dropping employees in September 2008, but the pace of those losses started picking up steam in the fall of 2010. Since August 2010, state government employment has fallen by 81,000 employees.

According to data from the Census Bureau's Annual Survey of Public Employment and Payroll, state and local governments lost more than 203,000 jobs in 2010 alone. John Lonski, chief economist for Moody's Capital Markets Research, told Reuters that this is the worst contraction of state and local government employment since 1981.

Most state governments saw decreases in full-time employees between 2009 and 2010. Idaho, Connecticut and Rhode Island saw the largest declines, each losing about 5 percent of their employees. Texas, on the other hand, actually added 5.6 percent more employees to its workforce, which was the largest percent increase of any state. 

Thirteen states added employees in 2010, ranging from a high of 17,800 full-time equivalent employees in Texas, 4,365 in Pennsylvania (+2.6 percent) and 4,334 in North Carolina (+2.6 percent). Five of those 13 states added about 500 or fewer full-time equivalent employees.

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