State and Local Job Losses Are Largest Since 1955

July 8, 2011 at 4:05 pm

The gloomy employment report for June included the news that state and local governments laid off 25,000 workers.  Since shortly after the recession began, they have cut 577,000 jobs — the largest loss since the Labor Department started keeping track in 1955. These devastating layoffs are slowing the economic recovery.

State and Local Government Payrolls Are Shrinking

Local school districts, counties, and cities cut 18,000 jobs in June, the Labor Department reported.  Another 7,000 state workers lost their jobs, leaving state payrolls well below pre-recession levels.  June was the eighth consecutive month — and the 28th out of the last 34 — in which total state and local employment shrank.

These cuts in public payrolls come in response to the long, deep recession and its aftermath, which have left states and localities without the revenue needed to pay salaries.  State revenues remain 9 percent below pre-recession levels.

The job cuts have been widespread.  Since state and local employment peaked in August 2008, payrolls have shrunk by 577,000 jobs:

  • Local school districts have cut 223,500 positions.
  • Cities, counties, and other local governments have cut 236,000 jobs.
  • State governments have cut 118,000 workers.

These cutbacks come at the same time that the economic slowdown has caused more hardship among citizens and greater need for public services. For example, 7.6 million more people are enrolled in Medicaid, mainly because so many lost their health insurance when they lost their jobs.  And this fall there will be an estimated 261,000 more public school students than when the recession began.  The numbers of senior citizens, young children, and unemployed individuals — three groups that tend to use more public services — also have grown.

Many states have enacted deep spending cuts for the new fiscal year that will lead to even more job losses for public employees.  Next year, states face new shortfalls — large by historical standards —that could lead to more layoffs.

The result? The quality of life in communities will suffer.

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More About Michael Leachman

Michael Leachman

Michael Leachman joined the Center in July 2009. He is the Director of State Fiscal Research with the State Fiscal Project.

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1 Comments Add Yours ↓

Comments are listed in reverse chronological order.

  1. Phil #

    This brings us back to 2006 levels, which were 500,000 more than 2002 levels which were 500,000 more than 2001 levels. Let’s put this in perspective. The 3% drop in the last couple of years is minor compared to the 16% increase in the decade that preceded it. And the 16% increase in the decade before that. State and local governments are more bloated than the federal government.

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