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Public Sector Employment - 6/10/14

By reporting the addition of 217,000 net new jobs last month, May’s employment report means that America’s economy has finally exceeded its pre-recession employment peak.  But as reported in the New York Times and by other media sources, that milestone obscures two very different labor market stories.  While private sector employment exceeded its pre-recession employment peak several months ago, the public sector, which encompasses federal, state and local government, is still not close to returning to pre-recession employment levels. 

If fact, public sector employment has barely begun to recover.  Employment among government agencies reached a recent low of 21.8 million jobs in December and has barely expanded since.

While many might think of sequestration and the recent federal government shutdown when considering public employment, much of the loss in public jobs has been among state and local governments, which cut jobs sharply in response to budget shortfalls during the recession.  The federal government employs somewhat fewer people than it did in December 2007 and recent reductions in federal employment stand in stark contrast to the government’s expansion during the periods following the recessions of the 80's and 90's.

Anirban Basu, Chariman Chief Executive Officer of Sage Policy Group (SPG), is one of the Mid-Atlantic region's leading economic consultants. Prior to founding SPG he was Chairman and CEO of Optimal Solutions Group, a company he co-founded and which continues to operate. Anirban has also served as Director of Applied Economics and Senior Economist for RESI, where he used his extensive knowledge of the Mid-Atlantic region to support numerous clients in their strategic decision-making processes. Clients have included the Maryland Department of Transportation, St. Paul Companies, Baltimore Symphony Orchestra Players Committee and the Martin O'Malley mayoral campaign.