Government Layoffs Have Been Undermining The Recovery For Five Years


State, local, and federal government payrolls shrank by 29,000 jobs in January, according to the Bureau of Labor Statistics data released Friday, continuing a damaging and historically unusual trend that has undermined the economic recovery throughout the past five years.

Despite spiking briefly during the 2010 Census, the public-sector workforce nationwide is nearly three-quarters of a million jobs smaller than it was when President Obama took office. In that same time, the private sector has added 3.5 million jobs on net, even after accounting for the millions of jobs lost in the economic free fall five years ago:

job growth public private 1/09 to 1/14

About a third of these public-sector job cuts come in the crucial field of public education, as local school districts cut staff by more than 250,000.

This is not how recoveries are supposed to work. Presidents Bush, Clinton, and Reagan all faced recessions early in their presidencies, and each man oversaw substantial public-sector job growth. Bush alone oversaw the addition of more than a million new public-sector workers during his first term.

While the public sector cuts undermining the Obama recovery are unprecedented, they are not hard to explain. Austerity policies at the state and federal level gave rise to the worst three-year run on record for public sector job growth. Those layoffs pull money out of the whole economy, spreading the pain from government workers to everyone else.

More recently, the government shutdown and sequestration cuts knocked a quarter off of overall economic growth for 2013. The unemployment rate would be a full percentage point lower without the roughly $2.5 trillion in deficit reduction policy enacted since conservatives swept into a House majority in the 2010 elections.