14. State Government Employment
Furloughs. Layoffs. Salary and hiring freezes. Battles over collective bargaining rights. Uncertain funding futures.
The past few years were a roller coaster ride for state government employees. As states struggled to balance budgets, government employees—including teachers—became a hot topic in state houses across the country.
“The stability of state government employment has changed as states, facing unprecedented revenue shortfalls, have been forced to make tough budgetary decisions that ultimately affected the workforce,” said Leslie Scott, executive director of the National Association of State Personnel Executives.
The Great Recession has had an unprecedented effect on state and local government employment and will likely continue to affect levels of employment in the coming years.
“We are looking at the worst contraction of state and local government employment since 1981,” John Lonski, chief economist for Moody’s Capital Markets Research, told Reuters news agency.
In past recessions, state and local government employment was quite stable as compared to the private sector. That trend did not continue during and after the Great Recession. According to data from the U.S. Census Bureau, state and local governments lost 203,321 jobs in 2010. Thirty-seven states shed state government employees in 2010.
“This uncertainty has caused a decrease in employee morale and engagement, which our organization’s membership identified as its top issue for 2011,” said Scott.
A marked increase in federal aid, primarily through the American Recovery and Reinvestment Act, helped preserve a significant number of state and local jobs since 2009, but those funds are now dwindling. The loss of significant amounts of this support in the 2012 fiscal year, including enhanced Medicaid funding and funding through the State Fiscal Stabilization Fund, will likely lead to continued loss of state and local government jobs throughout the upcoming year. Jobs in education are particularly vulnerable to a loss in stimulus funding, which has provided a boost of $84.4 billion for education spending.
As states look for ways to save money on personnel, layoffs aren’t their only option.
“In fiscal year 2012, states continue to feel the effects and are renegotiating bargaining contracts in lieu of layoffs, and are asking employees to contribute more, sometimes for the first time, to their pensions and health care,” said Scott.
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