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.