Companies in the U.S. have been slowly adding workers
for more than two years. But pink slips are still going out in a
crucial area: government.
In California, the governor is threatening to eliminate 15,000 state jobs. When school begins in Cleveland this autumn, more than 500 teachers probably will be out of work. And in Trenton, New Jersey -- which has already cut a third of its police force, hundreds of school district employees and at least 150 other public workers -- only a possible federal grant can forestall the loss of 60 firefighters.
Government payrolls grew in the early part of the recovery, largely because of government stimulus measures. But since its postrecession peak in April 2009 (not counting temporary Census Bureau hiring), the public sector has shrunk by 657,000 jobs. The losses appeared to be tapering off this year but have accelerated for the past three months, creating the single biggest drag on the recovery in many areas.
With the economy expanding, albeit slowly, state tax revenues have started to recover and are estimated to exceed prerecession levels next year. Yet governors and legislatures are keeping a tight rein on spending, whether to refill depleted rainy-day funds or because of political inclination.
At the same time, costs for health care, social services, pensions and education are still rising. Fourteen states plan to resolve their budget gaps by reducing aid to local governments, according to a report by the National Governors Association and the National Association of State Budget Officers.
So although the national government has grown a little since the recession, and many states have recently begun to add a few jobs, local governments are making new cuts that outweigh those gains. More than a quarter of municipal governments are planning layoffs this year, according to a survey by the Center for State and Local Government Excellence. They are being squeezed not only by declining federal and state support, but by their devastated property tax base.
"The unfortunate reality is, our revenue streams have not rebounded," said Timothy R. Hacker, the city manager of North Las Vegas, Nevada, which has cut its work force to 1,300 from 2,300 and is about to lay off 130 more. "Shaking this recession is becoming increasingly difficult."
Pennsylvania, for example, has shed 5,400 government jobs this year, and many school districts and social service agencies are contemplating more layoffs. "We have slipped to the middle of the pack in terms of job growth," said Mark Price, a labor economist at the Pennsylvania Budget and Policy Center. "And that was driven mainly by the fact that we lost so many jobs in the public sector."
Public workers became a point of contention in the presidential campaign recently when Mitt Romney, the presumptive Republican nominee, criticized President Barack Obama for wanting to increase the number of government employees through stimulus measures. "He says we need more firemen, more policemen, more teachers," Mr. Romney said, adding: "It's time for us to cut back on government and help the American people."
Mr. Obama has made the counterargument that during past recessions the government sector has grown, rather than shrunk. The White House later said he meant recessions and the recoveries that followed.
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