- Back to Home »
- Public Sector Job Losses in Indiana
Thursday, May 10, 2012
The Wall Street Journal reported
yesterday that the national unemployment rate would be 7.1% in the
event that state and local government jobs were spared. The methodology behind
this calculation requires too many assumptions for a blog post, so we’ll stop
short of calculating a hypothetical rate for Indiana. However, the article suggested
that:
“One
reason the unemployment rate may have remained persistently high: The sharp
cuts in state and local government spending in the wake of the 2008 financial crisis,
and the layoffs those cuts wrought.”
The Institute reported in its Status
of Working Families, 2011 report that:
“From August 2008 through
February 2012, state and local government jobs have decreased by 5.2 percent.
This represents nearly 22 percent (21,200 jobs) of all jobs lost during the
same time period. In a single month, from August 2010 to September 2010, Indiana
shed nearly 10,000 state and local government jobs.” Only 10 states saw more
jobs lost at state and local government levels."
In the report, we provided the
following chart, displaying percentage changes in government employment 50
months after the 1981 and 2007 recessions. As shown, 4 years after the 1981 recession,
government employment (federal, state and local) had grown by 3.1 percent,
while 4 years after the 2007 recession, government jobs shrank by 1.7
percent—that’s a difference of hundreds of thousands of jobs.
In addition, EPI
notes that maintaining public employment levels supports private-sector
jobs by a number of economic multiplier effects, such as: reducing transfer
payments, private contracting, equipment suppliers and re-spending.
Of course, maintained
employment would not be possible without maintained spending. As such, we noted in the report that the most
robust of postmodern recessionary recoveries also coincided with the most
growth in government spending. Take a look here:
As Indiana lawmakers head to
summer budget hearings, caution should be given to policies that continue to
focus solely on decreased spending and cuts in public services without consideration
to gains in revenue and the clear impact it has had on
working Hoosiers.
Awesome post. Thanks for sharing details about
ReplyDeleteState Government Jobs.