Layoffs make a lot of news, but over the long haul, governments have controlled their headcounts mostly through attrition. And salaries have more than kept up with the private sector’s.
We often hear that the nation’s dismal employment situation is partially the result of the loss of state- and local-government jobs. Now, with state and local tax revenues returning to normal and budgets coming out of the red, this situation is leveling — and in some cases reversing.
We thought it would be instructive to look at this issue on a longer time horizon — to go beyond the typical snapshot analysis — so we spent some time diving into numbers from the Census Bureau and the Bureau of Labor Statistics for the period from 1998 to 2012.
Our goal was to assess key trends in state and local government employment: What caused the recent job losses? Have government salaries kept up with the private sector? Did rising salaries or rising headcounts drive employee costs over the past decade and a half? Here is what we found:
Workforce reductions have come primarily through attrition, not people quitting or being laid off. States and local governments shed more than 1 million jobs in the aftermath of the recession. Many analysts have assumed this came from layoffs. This is not entirely true.
The quit-to-discharges ratio is used to calculate the ratio between those who leave their jobs voluntarily and those who are forced out. In 2009, this ratio was .81 for states and localities and .79 for the private sector, indicating that more people were being forced out of their jobs than were leaving voluntarily. By 2011, however, the state- and local-government quit-to-fire ratio stood at 1.10 compared to 1.14 in the private sector, indicating that more people were quitting than were being laid off.
Rather than layoffs, a failure to hire characterized the brunt of the total job losses in state and local government since 2009. The “hire-to-separation” rate, which must be above 1 for a sector to grow, was below 1 from 2009 to 2011 and just broke even in 2012, reaching 1.0061. This indicates that state- and local-government job losses were not disproportionately due to job losses but rather stemmed from significant non-hiring — letting vacant positions remain vacant.
Chosen excerpts by Job Market Monitor. Read the whole story at