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March 5, 2013

Putting the Sequester in Context: Recent Changes in Government Jobs

March 5, 2013

As reductions in federal spending on everything from defense to education to the Smithsonian go into effect, it’s worth considering who has lost government jobs over the past six years.  My recent research compares trends in public- and private-sector employment across education, age, and gender groups. Certainly, a broad range of workers suffered economic losses during this period.  However, I found that workers who had the toughest time in the private sector also fared the worst in the public sector.  In other words, cutbacks in government employment have reinforced, rather than buffered, negative private-sector job trends, particularly for the most vulnerable.

To take one example, let’s look at employment by level of educational attainment.  The chart below compares changes in federal, state and local, and private-sector employment during and after the Great Recession.  Workers with less education lost more private-sector jobs between September 2006 and 2009 and gained fewer—if any—jobs since then.  This holds true even after accounting for differences in underlying population growth across education groups:

percentageChangeForEmployeesByEducation

  • Workers with only a high school diploma saw private-sector employment fall by 9.3 percent, losing 3.5 million jobs between 2006 and 2009. In the recovery between 2009 and 2012, employment fell by an additional 1.5 percent, or 523,000 jobs. Meanwhile, the overall population of high school graduates grew 1.5 percent between 2006 and 2009 and 0.4 percent between 2009 and 2012.
  • Workers with the highest level of education (advanced degrees), in contrast, gained a 6.5 percent increase of 658,000 private-sector jobs between 2006 and 2009 and 14.7 percent (1.5 million jobs) between 2009 and 2012. The overall population of advanced degree holders did grow rapidly: 8.6 percent between 2006 and 2009 and 12.4 percent between 2009 and 2012.

Perhaps more surprising, public-sector workers with less education also did substantially worse than highly educated public-sector workers:

  • For those with only a high school diploma, federal employment fell 13.7 percent (118,000 jobs) and state and local employment fell 3.3 percent (114,000 jobs) between 2006 and 2009. Between 2009 and 2012, federal employment grew 1.6 percent (12,000 jobs) while state and local employment fell an additional 4.4 percent (149,000 jobs).
  • For those with advanced degrees, federal employment grew 25.0 percent (127,000 jobs) between 2006 and 2009 while state and local employment did not change. Between 2009 and 2012, federal employment then grew an additional 16.1 percent (102,000 jobs) and state and local employment grew 4.7 percent (192,000 jobs).

In other words, the most highly educated workers did better in both the private and public sectors even after we account for differences in population growth.

The sequester reduces defense spending substantially, so we might anticipate a different distribution of federal, state, and local cutbacks than we saw in the last six years. Nevertheless, with unemployment still near 8 percent, a loss of more public-sector jobs won’t strengthen the private sector either. But if the sequester must happen, let’s hope the most vulnerable workers, regardless of where they happen to work, are spared this time around.

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