Public Sector Job Losses Continue To Hinder Recovery

Earlier today, we released our Labor Day report for 2012, the CBP’s annual look at the California job market and how the state’s workers and their families are faring. Overall, the latest available data are troubling. More than three years since the Great Recession ended, California still confronts a huge jobs shortfall, having gained back less than two-fifths of the nearly 1.4 million jobs it lost during the downturn. What’s more, the purchasing power of the typical California worker’s hourly wage has hit its lowest level in almost 15 years, and long-term joblessness is down only modestly from a record high. Read the full report here.

One of the key take-aways from this Labor Day report is that deep cuts in state and local government budgets continue to weigh on the state’s economy. Although recent private sector job gains in California have been much stronger – in percentage terms – than those in the nation as a whole, public sector job losses continue to offset a portion of these gains.

As the chart above shows, California lost more than 31,000 state and local government jobs between June 2011 and June 2012. This accounts for one job lost for every 10 private sector jobs gained during this period. More than three-quarters of these lost jobs were in K-12 public schools and community colleges.

Several years of deep budget cuts to core public systems, including K-12 education and higher education, are hampering the state’s ability to rebound quickly from the Great Recession as well as threatening to limit our ability to prepare the state’s workforce to compete in the global economy. New revenues to help prevent deeper cuts and allow us to begin reinvesting in education and other public systems that contribute to a strong economy are more important than ever.

– Steven Bliss