Cut Loose: State and Local Layoffs of Public Employees in the Current Recession

In the current recession, millions of Americans have lost their
jobs. Unemployment has increased nationwide to levels not witnessed
since the 1980s. Much of the job loss has occurred in private
industries, but the public sector has also felt the sting of layoffs.
Decreasing tax revenues and expanding budget deficits have forced
public officials to make difficult decisions regarding their payroll.
According to our analysis, more than 110,000 jobs have been shed from
state and local governments in the last two years. This number includes
over 40,000 teachers as well as nearly 4,000 uniformed police officers
and firefighters.¹

Certain regions of the country have been more heavily impacted by the
current economic downturn, and their state and local governments have
experienced proportionally more job loss, than others (see Figure 1 and Table 1
below). The most populous states have suffered the most. The five
largest states - California, Florida, Michigan, New York, and Illinois
- account for nearly half of the public sector job loss nationwide. In
California alone, extended deliberation over the government's budget
has resulted in nearly 28,000 layoffs, including more than 13,000
teachers.

Within states, big
cities have experienced the most concentrated job loss. In the state of
Nevada, the number of teachers, city workers, and university employees
in Las Vegas who have been laid off account for more than half of the
state's public sector job loss. In Alabama, Birmingham's Jefferson
County has closed several offices and laid off more than 1,000
employees - about a quarter of its workforce. The county's sheriff
described the situation as an "unnatural disaster" when he requested
that troops from the National Guard be sent in to help patrol the
streets.²
In New York, after publicly revealing a "doomsday budget" that included
23,000 job cuts, the mayor and the city council of New York City
eliminated about 2,000 jobs from the city's workforce.3
To be sure, some states and localities have been relatively shielded
from the effects of the current recession. In eleven states, total
public sector job loss was less than 100 jobs, but these include many
of the least populous states. In general, the heavy population centers
are experiencing the most pain.

FIGURE 1

One factor that has reduced the number of layoffs in some areas has
been the injection of federal stimulus money. In Indianapolis Public
Schools, 300 teachers were rehired after they were laid off with the
use of federal stimulus aid.⁴ In Montgomery County, Maryland, 200 teaching jobs were restored with stimulus money.⁵ And in Boston, federal grant money was able to save 50 jobs in the police department.⁶

However, job loss numbers do not tell the whole story. Several states
have issued hiring freezes and mandated pay cuts in their departments.
Others have offered buyout schemes in order to encourage more senior
employees to retire early.⁷
Still more states have instituted furlough plans in order to cut costs
in their budget. In Hawaii, on top of 1,339 announced layoffs, the
government has mandated that state workers take three unpaid days of
leave per month, for two years. In some states, such as New Jersey and
Connecticut, public employee unions have agreed to accept these
furlough plans in exchange for a guarantee of no layoffs.⁸
In the end, all these cost-cutting measures, whether they involve
layoffs or not, impose real economic burdens on the livelihoods of
public employees.

Despite all
of the budget cuts that have already been endured, current projections
indicate that the situation is only going to get worse. Research from
the Center on Budget and Policy Priorities indicates that 48 out of 50
states face budget shortfalls through fiscal year 2010, and the total
budget shortfall for the country is expected to expand further in the
future. States such as Ohio and Louisiana are dipping into their "rainy
day" reserve funds in order to balance their budgets, but these funds
are finite and could be exhausted before the national economy turns
around. Should these projections prove to come true, state and local
governments will be forced again to make another round of difficult
decisions regarding the jobs and salaries of teachers, police officers,
firefighters, correctional officers, and other government employees.

TABLE 1
Total Reported Layoffs of Public Sector Employees, by State and Metropolitan Area

NOTE:
These numbers represent a temporary snapshot of the employment picture;
they will require further revision as future events unfold.
*Indicates no reported layoffs (NR) in this state, according to our analysis.