Citizens Research Council Report Tracks Changes in Public Sector Employment Caused by Recession
Michigan has been shedding jobs continuously since June 2000, and Michigan employment is now more than 20 percent below the June 2000 peak. In its most recent publication, the Citizens Research Council of Michigan, focuses on the job losses in the public sector over this time period, comparing public sector outcomes with what has occurred in the private sector. Michigan Private and Public Sector Levels over the Business Cycle finds that the changes in public sector employment have been multifaceted, with the public sector employment changes dependent on a number of factors.
In the short-term, public sector employment levels tend to be more stable than the private sector. This is attributable to a host of factors, including the composition of state and local government employment, the relative stability of the underlying revenues supporting state and local jobs, and the "countercyclical" nature of some governmental programs. As a result, state and local government employment may not react as quickly to the ups and downs of the business cycle. Over the longer-term, however, public sector budgets are forced to cope with declining resources and adjust personnel levels accordingly.
Over Michigan's prolonged recession, dating back to 2000, trends in public sector employment levels mirror what has occurred in the private sector, but without the severity. Since its high water mark in August 2001, the size of the public sector in Michigan has contracted. Within the public sector, however, there has been considerable variance with respect to composition. Generally, higher education and hospital employment levels are up and K-12 education and State of Michigan classified employment levels are down.
"No doubt Michigan's public sector, like the private sector, has been affected by the economic challenges facing the state. The slowdown in economic activity has reduced public budgets and therefore employment levels in state and local government, but most of the changes are visible over the longer-term as opposed to the short-term," commented Craig Thiel, CRC's Director of State Affairs.
The report and its summary can be read on the CRC website, www.crcmich.org.
The Citizens Research Council of Michigan is a private, nonprofit public affairs research organization, founded in 1916 to analyze issues pertaining to state and local government organization and finance in Michigan.
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