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How Public Sector Layoffs Are Holding Back the Recovery

Sunday, 11 March 2012 05:41 By Heather Boushey, ThinkProgress | Report
How Public Sector Layoffs Are Holding Back the Recovery

Jim Unland, the president of a local police association, in San Jose, California, February 7, 2012. San Jose, a growing city in the heart of Silicon Valley, has had to lay off about a fifth of city employees and reduce services sharply. (Photo: Annie Tritt / The New York Times)

The current economic recovery is going well if one looks at private sector job creation. The pace of private sector job creation is slower than in the recovery from the early 1990s recession, but it’s about the same as it was during the economic recovery in the early 2000s. In the first two years of both the current and early 2000s recovery, employment grew by 3.7 percent.

But since early 2009, governments at all levels have shed nearly 700,000 jobs, most of them at the state and local level. Since August of 2008 state and local governments have shed a total of 647,000 workers, of which 64 percent, or 416,000, were women workers.

When we compare total employment between the current and early 2000s recovery, the loss of public sector jobs pops out: Employment growth is 0.6 percent lower in this recovery than it would have been had government chosen not to hand out so many pink slips.

Last month there were 6,000 government layoffs, a much smaller number than in recent months, but still a drag on the recovery. And the crazy thing is that while policymakers cannot control the actions of private employers, they do control how much they add to the nation’s unemployment woes via government layoffs. Laying off teachers and police-officers as the nation struggles to get back to full employment is the wrong policy at the wrong time.

Heather Boushey

Heather Boushey is Senior Economist at American Progress. Her research focuses on employment, social policy, and family economic well-being. Much of her current work focuses on the Great Recession’s impact on workers and their families, as well as policies to promote job creation. She co-edited The Shriver Report: A Woman’s Nation Changes Everything (Simon & Schuster ebook, 2009) and was a lead author of “Bridging the Gaps,” a 10-state study about how low- and moderate-income working families are left out of work support programs. Her research has been published in academic journals and has been covered widely in the media, including regular appearances on the PBS Newshour and in The New York Times, where she was called one of the "most vibrant voices in the field." She also spearheaded a successful campaign to save the Census Bureau's Survey of Income and Program Participation from devastating budget cuts.  

Boushey received her Ph.D. in economics from the New School for Social Research and her B.A. from Hampshire College. She has held an economist position with the Joint Economic Committee of the U.S. Congress, the Center for Economic and Policy Research, and the Economic Policy Institute, where she was a co-author of their flagship publication, The State of Working America 2002/3. She grew up in a union family in Mukilteo, Washington, and now lives with her husband, Todd Tucker, in Washington, D.C.


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How Public Sector Layoffs Are Holding Back the Recovery

Sunday, 11 March 2012 05:41 By Heather Boushey, ThinkProgress | Report
How Public Sector Layoffs Are Holding Back the Recovery

Jim Unland, the president of a local police association, in San Jose, California, February 7, 2012. San Jose, a growing city in the heart of Silicon Valley, has had to lay off about a fifth of city employees and reduce services sharply. (Photo: Annie Tritt / The New York Times)

The current economic recovery is going well if one looks at private sector job creation. The pace of private sector job creation is slower than in the recovery from the early 1990s recession, but it’s about the same as it was during the economic recovery in the early 2000s. In the first two years of both the current and early 2000s recovery, employment grew by 3.7 percent.

But since early 2009, governments at all levels have shed nearly 700,000 jobs, most of them at the state and local level. Since August of 2008 state and local governments have shed a total of 647,000 workers, of which 64 percent, or 416,000, were women workers.

When we compare total employment between the current and early 2000s recovery, the loss of public sector jobs pops out: Employment growth is 0.6 percent lower in this recovery than it would have been had government chosen not to hand out so many pink slips.

Last month there were 6,000 government layoffs, a much smaller number than in recent months, but still a drag on the recovery. And the crazy thing is that while policymakers cannot control the actions of private employers, they do control how much they add to the nation’s unemployment woes via government layoffs. Laying off teachers and police-officers as the nation struggles to get back to full employment is the wrong policy at the wrong time.

Heather Boushey

Heather Boushey is Senior Economist at American Progress. Her research focuses on employment, social policy, and family economic well-being. Much of her current work focuses on the Great Recession’s impact on workers and their families, as well as policies to promote job creation. She co-edited The Shriver Report: A Woman’s Nation Changes Everything (Simon & Schuster ebook, 2009) and was a lead author of “Bridging the Gaps,” a 10-state study about how low- and moderate-income working families are left out of work support programs. Her research has been published in academic journals and has been covered widely in the media, including regular appearances on the PBS Newshour and in The New York Times, where she was called one of the "most vibrant voices in the field." She also spearheaded a successful campaign to save the Census Bureau's Survey of Income and Program Participation from devastating budget cuts.  

Boushey received her Ph.D. in economics from the New School for Social Research and her B.A. from Hampshire College. She has held an economist position with the Joint Economic Committee of the U.S. Congress, the Center for Economic and Policy Research, and the Economic Policy Institute, where she was a co-author of their flagship publication, The State of Working America 2002/3. She grew up in a union family in Mukilteo, Washington, and now lives with her husband, Todd Tucker, in Washington, D.C.


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