As politicians in Washington debate how to shrink the size of government, their counterparts in statehouses have actually been doing it. Public-sector jobs now account for the smallest share of the nation’s employment since the 2008 financial crisis, according to new data released Friday.
In October, the public sector cut 24,000 jobs while private industry continued adding jobs at a steady clip, the Labor Department said Friday. The nation’s unemployment rate fell slightly to 9 percent — but it would have been 8.7 percent had state and local governments not contracted the past two years.
Amid lower tax revenue due to the recession, state and local governments have cut 455,000 jobs since the beginning of 2010, almost half of them in education.
Overall, the proportion of government jobs fell to 16.7 percent in October, its lowest level in three years.
The cuts are a victory for those who argue for a leaner public sector, but they have also weighed down the overall job market.
“Things are moving in the right direction, but they’re not moving fast enough,” said Alan Krueger, who was confirmed late Thursday as chairman of the White House Council of Economic Advisers. “The gains in the private sector were fairly broad-based, which was good to see, but we keep seeing government employment contracting, especially at the state and local level.”
The report on the job market showed 80,000 net new jobs were created last month, with the strongest gains in the professional and business services sector, which added 32,000 positions — 15,000 of them at temporary help services. Other gainers included health care and education, which added 28,000 jobs, and leisure and hospitality, which added 22,000.
During the recession of 2008 and 2009, public employers generally held steady, not slashing jobs substantially. But since then, particularly since federal stimulus dollars ran out in 2010, the losses have been persistent.