Jobs are coming back from the pandemic recession in many sectors, with healthy growth across many industries—but not state and local government. We need public employment to provide the infrastructure and services that make a modern economy run while taking care of those in need, and our failure to invest in public workers is costly and short-sighted.
Although most public jobs are in education, government workers are essential across the economy. Public safety, fire prevention, health and hospitals, sewage and water, road maintenance, garbage collection, food safety—all rely on an effective public workforce.
But jobs in state and local government haven’t returned to pre-pandemic levels. A recent report by theCenter for American Progress (CAP) estimates we have 695,000 fewer compared to before COVID-19, a 3.5% reduction.
This failure to rebuild our public sector follows on the poor performance following the Great Recession. The CAP researchers note that it took 11 years for state and local jobs to come back after the Great Recession. As a result, with the job losses due to the pandemic, “the state and local government workforce continues to operate…below 2008 recession levels.”
These job losses hit women and workers of color especially hard. The Economic Policy Institute (EPI)pointed out in 2020 that “the public sector has been a key employer for women and people of color,” as the public sector has higher unionization and greater protections for workers against discrimination.
A 2020 CAP report pointed out “nearly 1 in 5 Black workers are employed in the public sector.” Starting with FDR, almost every administration issued executive orders “to expand discrimination protections.” Federal, state, and city governments also enacted programs to support fair contract procedures for minority and women-owned businesses.
So why the current shortfall? On the jobs side, many states and cities have been reluctant to spend funds on rebuilding their workforces. Immediately after the pandemic, many of them suffered large revenue shortfalls, making them cautious about rehiring.
But the “Biden boom” in the economy, along with federal aid to state and city budgets, has provided substantial revenues for many governments. The National Conference of State Legislatures (NCSL) says 25 states expect to exceed their annual revenue forecasts for the current fiscal year, and “no state has indicated it unlikely to meet” its forecast.
Some governments are using those revenues, and federal American Rescue Plan Act (ARPA) funds to re-employ public workers and provide better services in health, education, transportation, and other sectors. Although analysts caution that ARPA funds are temporary and shouldn’t be used to take on new major long-term spending obligations, restoring public employment at least to pre-pandemic levels is a responsible use of ARPA.
But other states and cities are taking their positive revenues as a rational for deep tax cuts. This not only prevents rebuilding the public sector, but reduces future tax capacity that will undercut future public services.
And although governments could use tax cuts to increase fairness and reduces burdens on low income families, many of these cuts instead reward wealthier taxpayers. Iowa is making its income tax more regressive. Governing magazine reports the state is enacting a total tax cut of around $1.9 billion, “huge in a state with an $8 billion annual budget.”
Mississippi is one of the nation’s poorest states. It struggles to pay for public education and hospitals, and is one of only 12 nationally still refusing to expand Medicaid for its poor residents. But the state is enacting a major income tax cut, where US News and World Report says “wealthy people would see the biggest financial boost” while “the poorest residents would see no benefit.”
Such attitudes towards funding public services, along with burnout from COVID-19, has many government workers contemplating retirement or leaving for better-paying private sector jobs.
A recent report from the MissionSquare Research Institute found 52% of state and local workers “considering leaving their jobs voluntarily,” with “stress of job during pandemic” being a major reason.
That report and the CAP analysis both cite improving pay and benefits as critical for retaining and attracting public employees. Without addressing the needs of this essential workforce, we are reducing public sector capacity with each successive crisis. The public sector didn’t recover from the Great Recession and now we aren’t addressing the losses caused by the pandemic.
As the CAP researchers point out, “every time state and local governments lose capacity to deliver services, these sectors are less and less equipped to address the next crisis.” If our recent history has shown us anything, it is that we seem to be in a perpetual series of crises. Restoring our public sector is essential to prepare for the next one.