It used to be that when economic times got tough, people sought out public employment. The pay was less than in the private sector, but the job security was pretty good, and at the end you got a pension.
Nowadays, when including all the benefits, public sector pay is higher than what you can get in the private sector, so the jobs are that much more attractive.
Unfortunately, those jobs are harder to get today than they were in years past, and chances are they won’t come back anytime soon.
This usually isn’t the case coming out of a recession, when public employment typically grows faster than the private sector. When the economy turns down, people depend more on public services. That creates even more demand for what governments provide, and requires more workers to meet those needs.
In fact, this is exactly what has occurred since the 1950s… until now.
The Rockefeller Institute studies the financial aspects of state and local government.
According to their research, public employment six years after the end of a recession was always higher – and sometimes much higher – than when the recession started, going back to 1957.
The years of the recessions they reviewed, and the employment change six years later, are as follows.
The latest downturn is an outlier when it comes to public employment. But I doubt it’s an anomaly. It’s much more likely a harbinger of what lies ahead.
The problem isn’t that states want to offer less service. Our population has grown between 6% and 8% in each of these time frames. There’s plenty more people to serve.
The problem is that they can’t afford it. More specifically, state budgets are getting overwhelmed with Medicaid costs.
Medicaid expenses increased by 28.7% between 2008 and 2013. To put that in context, education spending moved up just 1.7%… expenditures for police, highways, and natural resources was actually down 5.8%… and administrative spending was down 7.7%. Overall, state expenditures were up just 3.7%.
