Economic Snapshot | Budget, Taxes, and Public Investment

Employment during the economic recovery

Two years after the official end of the Great Recession, the continued loss of public-sector jobs is an obstacle to reaching pre-recession employment levels. This decline in government employment is a historic anomaly; public-sector employment actually increased in the two years after official recoveries began in 10 of 11 post-World War II business cycles. The lone exception was in the early 1980s when the economy experienced a double-dip recession.

In total, the public sector has lost 430,000 jobs compared to the private sector’s net gain of 980,000 jobs since the Great Recession ended in June 2009 – an average of nearly 19,000 jobs each month over that time. Last Friday, the shutdown of Minnesota’s government placed about 22,000 state employees out of work until their budget dispute is resolved. Unfortunately, further budget cuts at the state, local, and federal levels seem to be on the horizon, exacerbating this problem in the U.S. labor market.