Employment at State, Local Level Nearly 1.4 Million Below Pre-Pandemic Level
Washington, DC—February was yet another dire month in the labor market, particularly at the state and local government level. In its monthly employment survey, the Bureau of Labor Statistics (BLS) reported a drop of 83,000 jobs in state and local government.
With jobs in such a deep hole, the report underscores the critical need for Congress to provide the direct fiscal relief for cities and states included in President Biden’s American Rescue Plan. To date, cities have almost entirely been left behind in Washington’s response to the COVID-19 crisis. Increased expenses and a sudden drop-off in tax revenue have left cities everywhere facing huge budget shortfalls and painful decisions.
“Today’s jobs numbers show that local governments remain under severe pressure, with more than a million lost jobs in cities in the last year,” said U.S. Conference of Mayors President and Louisville Mayor Greg Fischer. “The country is digging out of a deep hole, and the report underscores the critical need for Congress to provide the direct fiscal relief for cities and states included in President Biden’s American Rescue Plan now. Lives and livelihoods are on the line, and that’s why Congress must act quickly to send the president legislation to help end this crisis and bring stability to American cities.”
As the report today makes clear, the fiscal crisis facing American cities is a jobs crisis. And a failure to address it now will have long-lasting effects on the country’s economic recovery, not to mention the lives of those who have lost work in state and local government as a result of the pandemic. As the New York Times put it earlier this year, “Those governments account for about 13 percent of employment in the United States, which makes their trajectory extremely important to the nation’s labor market outlook. Because most are required to balance their budgets, lower income or higher expenses can lead to big job cuts.”
By the Numbers:
- 1,391,000 state and local jobs lost (year-over-year)
- 1,033,000 local jobs lost (year-over-year)
Economists, including Federal Reserve Chairman Jerome Powell, have warned that leaving cities and states behind will create a drag on the economy. They cite lessons learned from the inadequate support for state and local governments in response to the 2008 financial crisis and the great recession that followed.
Fiscal relief can mitigate this problem and help ensure cities are part of a robust economic recovery; that’s why mayors across the country continue to call on Congress to act quickly.