CHART: Comparing Public Sector Employment Following Recent Recessions

Our guest blogger is Isha Vij, a research assistant with the Economic Policy Team at the Center for American Progress Action Fund.

Since the onset of the current (horribly slow) economic recovery more than two years ago, state and local governments have shed over 600,000 jobs. Compare this to the same point in the recovery for the past three recessions (early 1980s, early 1990s, and early 2000s), where state and local governments created roughly 290,000, 490,000 and 240,000 jobs respectively:

The U.S. has lost over 60 percent of these jobs in our current recovery and will continue to do so unless policymakers start making the necessary public sector investments — such as in education. Continuing to cut state and local budgets has an extremity destructive impact on our recovery efforts.

As Matthew Yglesias explained, “conservatives complain about the results because the President is a Democrat named Barack Obama. But the policy result is what conservatives say they want. Steady cuts to the government sector, offset somewhat by private sector growth.” Contractionary fiscal policy will continue to dampen hiring in the months to come, as funds from the American Recovery and Reinvestment Act are now mostly spent and 46 states and the District of Columbia have cut their budgets in the past year. Furthermore, it is estimated 42 states and the District of Columbia will experience significant budget shortfalls in the coming fiscal year, likely resulting in further cuts and even more job losses.

Job losses in state and local governments cause major repercussions to our already slowing economy. Last month’s Gross Domestic Product report showed that state and local government expenditures decreased by 2.8 percent in the last quarter in inflation-adjusted dollars. This is dragging down the recovery and preventing millions of Americans from getting back to work.