Public Sector Jobs Up in March, But Still Far Below Pre-Covid Levels

In this March 16, 2021, photo, school buses remain parked in Los Angeles.

In this March 16, 2021, photo, school buses remain parked in Los Angeles. AP Photo/Damian Dovarganes

 

Connecting state and local government leaders

State and local governments added about 129,000 jobs in March, with the bulk of the gains in education-related positions, according to Labor Department estimates released Friday. 

It was one of the stronger monthly increases for state and local public sector employment since the coronavirus outbreak began early last year. But the state and local government workforce is still far below pre-pandemic levels, down by around 1.2 million jobs compared to February 2020, the final month before the virus hit the U.S. in full force. 

The state and local government figures were part of a jobs report that was generally upbeat, with total non-farm payrolls rising by 916,000 and the unemployment rate declining to around 6%, from 6.2% in February. Despite the improvement, employment is still down by 8.4 million, or 5.5%, from its pre-pandemic peak in February 2020, the Labor Department said.

Job growth in March was widespread, based on the estimates. In addition to education, leisure and hospitality and construction saw gains—of 280,000 and 110,000 respectively. About 176,000 of the leisure and hospitality gains were in food services and drinking places, a category that includes restaurants and bars, businesses that have been hammered by the virus.

“March’s jobs report is the most optimistic report since the pandemic began. The end of the pandemic appears to be in sight as vaccine distribution accelerates,” Daniel Zhao, an economist with the workplace transparency website Glassdoor, wrote in a blog post on Friday. 

“While the pandemic is not over yet, the finish line appears close and the economy is surging forward in a last sprint toward a full reopening,” Zhao added.

Teryn Zmuda, chief economist for the National Association of Counties, pointed out that March was too soon for the billions of dollars in state and local aid from the latest coronavirus recovery package—the American Rescue Plan Act—to significantly influence workforce decisions. Zmuda said that once the aid is allocated to localities, hiring is apt to pick up.

“I would anticipate over the next couple months we’ll see small gains and it will likely be summer before we see any significant local government job gains,” she said. Zmuda also predicted that as the economy recovers, local governments would add jobs, not just replace the ones lost over the past year. “I think we’re going to see new jobs created,” she said.

The state and local job losses during the pandemic have been a mix of layoffs, furloughs, early retirements and positions left unfilled. Most of the job losses in the public sector, particularly at the state level, have been tied to education, as schools switched to remote classes and curtailed in-person learning, which in some cases reduced the need for staff.

In March compared to February, the Labor Department reported that the state education sector added 49,600 jobs, while state government outside of education lost an estimated 3,500 jobs, for a net employment gain at the state level of 46,000 positions. Local government added 83,000 jobs, with 76,000 of them tied to education. This means about 125,000 of the 129,000 added state and local government jobs last month were in education.

Still, the report notes that employment is down from February 2020 in local government education by about 594,000 jobs, while state government education is down by about 270,000.

“It’s still massive, I would say,” Elise Gould, senior economist with the Economic Policy Institute, a left-leaning think-tank, said of the state and local education jobs deficit. Gould said recovery funding and school re-openings should help education employment in the coming months.

Gould also said that, given the level of the federal aid, she expects the public sector jobs recovery to be stronger than it was in the wake of the Great Recession, which began at the end of 2007. “I am optimistic that we have learned our lesson from the very slow recovery of the public sector because of austerity in the years following the Great Recession,” she said.

Bill Lucia is a senior editor for Route Fifty and is based in Olympia, Washington.

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