Private sector down 300k jobs as public employment remains stable

By Don Carrington

June 13, 2011

CJ Photo by Don Carrington

Gov. Bev Perdue, using her veto stamp Sunday to reject the General Assembly's 2011-12 budget, said the spending plan would take North Carolina "backwards."

RALEIGH — Gov. Bev Perdue and her Democratic allies have claimed that the budget passed by the General Assembly would decimate public employment in North Carolina. And yet during the current recession, government agencies have been spared the massive job losses that have afflicted private companies.

Public sector employment levels in North Carolina have been stable since the start of the recession in December 2007. It would take a loss of 63,000 government jobs to match the nearly 9 percent net loss that has occurred in the private sector during that time.

Perdue vetoed the budget Sunday, saying it would cause "generational damage. ... The General Assembly may be satisfied with a state [that's going] in reverse, but I am not." Republicans have a veto-proof majority in the Senate and are four votes short of that margin in the House, and GOP leaders believe they can persuade at least four of the five Democrats who voted with them initially to override the veto.

Some government job losses are likely to result from the $19.7 billion 2011-12 state budget, but those job losses certainly will be overshadowed by the significant downsizing that already has taken place in private employment.

Perdue, Democratic leaders in the General Assembly, and the president of the North Carolina Association of Educators all have said that the GOP-led budget will lead to thousands of job losses in public education. To prevent that, they say the state should have extended a portion of the one-cent temporary sales tax that is scheduled to expire at the end of this month. The total estimated revenue loss to the state is about $1 billion. (Story resumes below chart.)



House Speaker Thom Tillis' “plan leads to thousands of classroom layoffs, increased class size, and will take North Carolina to near the bottom in per pupil funding nationally,” said NCAE president Sheri Strickland on Thursday.

The Republican budget “fires thousands of teachers and teacher assistants and damages the ability of young people to learn and succeed,” said House Democratic leader Joe Hackney, D-Orange.

Friday, Perdue's office provided Carolina Journal a comparison of public-sector job losses in the governor's budget and those in the budget passed by the General Assembly. Her calculations concluded that her plan would have eliminated 7,417 jobs in the coming fiscal year, 3,646 fewer than the General Assembly's budget would have cut. In either event, public sector employment continues to fare better than job losses experienced by private employers.

Republican legislative leaders have stated that the expiration of the temporary sales tax will allow consumers to spend more money and create new jobs in the private sector offsetting those eliminated by government.

Since the beginning of the recession in December 2007 when private sector employment statewide was 3.5 million, net job loses in the private sector reached a high of 410,700 in February 2010, according to data from the U. S Bureau of Labor Statistics. As of April, private sector employers have added back 99,000 net jobs, so private sector employment is still down 311,400 jobs.

Total government employment has remained essentially unchanged, with 711,100 jobs in North Carolina at the beginning of the recession in 2007 and 711,600 jobs in April. State and local government jobs, including public K-12 education, have remained about the same. Federal government jobs rose from 64,100 to 69,300.

President Barack Obama is scheduled to visit the Triangle today, meeting with his Council on Jobs and Competitiveness.

How jobs are counted

The Bureau of Labor Statistics in the U.S Department of Labor is the principal federal agency responsible for measuring labor market activity. Two programs supply the most commonly referenced employment numbers.

The first program, the Current Population Survey, is a monthly household survey conducted by the Census Bureau for BLS. It provides estimates for the number of persons employed, unemployed, and those not looking for work in the United States. This program calculates unemployment rates. The May U.S. unemployment rate was 9.1 percent. The latest available North Carolina rate was 9.7 percent in April.

The second program, the Current Employment Statistics Program, is a monthly survey of a sample of business establishments. The program generates estimates for the number of jobs in each industry type, in each state and the nation. Once a year, the employment estimates are compared to actual counts from administrative records in each state’s unemployment insurance program. Revisions are common and sometimes significant after the estimates are compared to actual counts.

Don Carrington is executive editor of Carolina Journal.

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