Investments in the State and Local Government Workforce Will Deliver Crucial Services and Create Economic Security

State and local government employees deliver critical services to constituents every day. They operate the nation’s buses and trains; deliver essential safety net services, such as housing, cash assistance, and health and unemployment insurance; teach and care for children; and contain infectious diseases and protect the safety of the nation’s water, food, and air. Yet the state and local government workforce has struggled to regain pandemic-related job losses, with 695,000 fewer people employed compared with pre-pandemic numbers.¹ Its labor market recovery has been notably slower than that of the private sector, despite infusions of federal funds.² A slower recovery in state and local government jobs not only affects constituents who directly rely upon their services but also has devastating impacts on the economic security of those most likely to work in these jobs, disproportionately women and workers of color.³

This report provides an overview of why investing in the local and state government workforce is critical for direct service provision and economic security. It includes new analysis showing that the occupations that experienced the largest job losses in 2021 compared with pre-pandemic levels facilitate direct service delivery to constituents. It also includes recommendations for how state and local governments can create a sustainable workforce in the long term through investments in hiring, recruitment, training, and compensation. It is imperative that governments work to address these job losses and strengthen this critical workforce.

Delivering essential services

State and local governments deliver the services that most Americans interact with every day. These sectors have significant control and impact in many areas:

• Public health infrastructure
• State universities
• Community colleges
• Workforce development systems
• K-12 education
• Public benefit programs, such as Temporary Assistance for Needy Families (TANF) and unemployment insurance

They license hundreds of critical occupations; provide law enforcement services; provide housing; oversee elections; and operate highways, parks, libraries, recreation centers, playgrounds, and museums. State and local governments are woven into the very fabric and functioning of our daily lives. For these services to be accessible to constituents, state and local governments need to be at full staffing and operational capacity.

The pandemic has shown how critical these services are and what happens when they do not work. For example, state unemployment systems and agencies, already significantly weakened due to shortfalls in administrative funding, were understaffed and ill-equipped to handle the onslaught of unemployment insurance claims caused by the pandemic, leading to significant delays in payments upon which families and individuals all over the country rely.⁴⁵ Difficulties in hiring and retaining public transit operators led to reduced services and fears among riders that they would not be able to get to school or work.⁶ President Joe Biden’s recent executive order on improving customer experience and service delivery acknowledges that reaching the administration’s goals of recovering from the pandemic and growing the economy will require a significant overhaul of the way federal programs are delivered, including coordinating with states that administer elements of federal services.⁷ Additionally, states and localities are working toward their own pandemic recovery goals, including enabling employment by funding essential services, education and career pathways, and child care.⁸ None of this can happen without a strong state and local workforce.

Building economic security, particularly for women and people of color

State and local governments also make up a large part of overall employment, accounting for around 12 percent of employed people.⁹ A majority of state and local government workers are women, and in 2021, 15 percent of employed women worked in state and local governments compared with 9 percent of employed men.¹⁰ This makes state and local governments not only large employers of women but also more diverse than the private sector. (see Figure 1)

Figure 1

Workers of color, particularly Black and American Indian, Aluet, and Eskimo workers, are disproportionately represented in these industries:¹¹

• 18 percent: Percentage of employed American Indian, Aluet, and Eskimo women working in local and state government in 2021
• 16 percent: Percentage of employed Black women working in local and state government in 2021
• 10 percent: Percentage of employed Black men working in local and state government in 2021
• 10 percent: Percentage of employed American Indian, Aluet, and Eskimo men working in local and state government in 2021

Employment in the public sector has long been a source of economic security for women and workers of color,¹² particularly Black workers.¹³ After World War II, new public employment opportunities under the control of state and local government—including public health, education, and infrastructure—were a focus of the civil rights movement.¹⁴ Research has shown that state and local jobs for Black workers can lead to higher wages and higher likelihood of homeownership. Thus, these jobs can help reduce persistent racial wealth and income gaps. These outcomes are largely due to civil service protections, such as standardized pay scales and higher rates of unionization, which prevent firings without cause.¹⁵ However, evidence from the Great Recession has shown that austerity measures and layoffs in the public sector disproportionately affect women, particularly women of color, and deepen occupational segregation. In the Great Recession recovery, women previously employed in the public sector were likely to regain employment in lower-paid industries, such as hospitality and retail trade.¹⁶ These outcomes are particularly detrimental to the economic security of Black and Native American women, who are often the breadwinners within their households.¹⁷

Maintaining employment in these sectors is critical because state and local jobs are much more likely to be relatively good jobs that provide workplace protections, decent wages, and benefits for workers experiencing intersecting and compounding racial, ethnic, and gender income and wealth gaps.¹⁸ In September 2021, employer costs for employee compensation (wage and salary costs, as well as benefits) averaged $54.46 per hour worked for state and local governments, compared with $37.24 per hour worked in the private sector.¹⁹ Differences in state and local government compensation spending are notably higher among services and office and administrative support occupations and lower among management and professional roles compared with the private sector.²⁰

In addition to better compensation, on average, in the state and local government sector, employee power is more established. State and local government jobs are also more likely to be unionized. While only 6.1 percent of private sector workers are members of unions, 29.6 percent of state government and 40.2 percent of local government workers are members of unions.²¹ State and local government employees are also significantly more likely to have access to pension plans. In 2018, 94 percent of full-time employees in state and local governments had access to defined-benefit pension plans, compared with 20 percent of the private sector.²²

Hiring in state and local governments has had a slow recovery

Public sector recovery today is hampered by a weak and slower recovery than experienced by the private sector following the Great Recession (see text box). In March 2020, public sector employment in many parts of the country still had not reached pre-2007 levels. Nationally, public sector employment has never recovered when accounting for population growth.²³ This pattern is repeating itself today, as the public sector has had a much slower pandemic recovery than most of the private sector.²⁴ Examining Current Employment Statistics (CES) data, a clear trend emerges—at an industry level, both local and state governments remain below pre-pandemic levels, with 695,000 fewer people employed in February 2022 than in February 2020.²⁵ In fact, local and state government job losses are second only to leisure and hospitality, which also disproportionately employ women of color.²⁶

Figure 2

Today, while the extent of the losses in both sectors differs by state, nearly all states, except Idaho, are employing fewer people in their state and local government workforce compared with pre-pandemic levels. (see Figure 3)

Figure 3

Occupations that facilitate direct service delivery have had significant job losses

This report looks beyond top-line industry job losses to shed light on what types of occupations within the local (see Figure 4) and state (see Figure 5) government workforce have experienced the largest job losses using the Integrated Public Use Microdata Series-Current Population Survey (IPUMS-CPS).³⁰ An analysis at the occupation level, shown in both Figure 4 and Figure 5, also reveals the impact of job losses on the services those occupations are meant to provide.

Figure 4

Figure 5

In 2021, the jobs that experienced the greatest losses compared to pre-pandemic levels tended to be public-facing occupations. This makes these job losses especially concerning as they affect the communities that benefit from these direct services, as well as the people who lost their jobs. These jobs tend to fall into two categories:

1. Positions that do not require postsecondary education, including many front-line, in-person occupations, such as janitors and drivers, have seen large job losses. These roles tend to be better compensated in the public sector than in the private sector, and workers of color are overrepresented in many of these occupations.³⁴ However, they have faced pandemic-related challenges, such as worker safety concerns, and are subject to the consequences of a tight labor market where workers have more power and could be choosing to leave these occupations altogether in search of better jobs.
2. Hard-to-fill positions that compete with the private sector, including data and computer scientists, tend to have high formal educational attainment requirements but are not usually paid as competitively as comparable roles offered in the private sector. This is an existing issue that the pandemic has merely made visible and heightened, particularly during a tight labor market.

Positions that do not require postsecondary education

Many jobs with lower barriers to entry within local and state government have seen large declines. This is a concern for the economic security of those most likely to occupy these positions (often women and disproportionately workers of color), as many of these jobs offer better wages than comparable positions in the private sector.

Administrative jobs, including office clerks, administrative assistants, and receptionists, have seen large declines. These workers are involved in the provision of direct services in health care, education, and government agency settings, fulfilling clerical tasks and providing information to direct users.³⁵ Within the local government workforce, office clerks and secretaries, as well as administrative assistants, have seen some of the largest job losses, with nearly 46,000 and 20,000 fewer people employed in these jobs in 2021 than in 2019, respectively. Similarly, in 2021, there were almost 9,000 fewer receptionists and information clerks employed within the state government than in 2019. These roles typically receive higher wages when employed in local or state government than in other industries (see Figure 4),³⁶ and are common occupations among women, particularly Black women.³⁷

Similarly, service occupations have seen large declines, many of which employ a disproportionate number of Black men. For instance, within the local government, janitors and building cleaners—the second-most-common occupation by volume for Black men³⁸ and Hispanic men working in local government—have seen large declines.³⁹ Within the state government, drivers—nearly 1 in 5 of whom are Black men—also experienced huge job losses.⁴⁰ Both these occupations, and many jobs that require a high school diploma or less, are better paid within local and state governments than in private settings. (see Figure 6)

Figure 6

Hard-to-fill positions that compete with the private sector

The state and local government workforce also experienced large losses of some hard-to-fill positions that struggle to compete with the private sector. For example, claims adjusters, appraisers, and examiners—who, in the state government context, may perform tasks such as adjudicating unemployment claims but are paid less than their private sector counterparts—have seen losses of 8,000 staffers, despite a likely increased need for their services. Accountants and auditors have also seen large job losses, with more than 19,000 fewer employed in local government and more than 7,000 fewer employed in state government in 2021 than in 2019. These roles tend to be female-dominated,⁴¹ more so than in other industries.⁴² However, they offer lower pay than other industries. (see Figure 7) Similarly, in state governments, there were 30,000 fewer computer scientists and analysts employed in 2021 than in 2019. These occupations—critical to the development and maintenance of public systems, especially during the pandemic, when services went almost fully online—can pay nearly $10 less per hour than those in private settings, with the wage gap larger for other relevant occupations such as computer and information research scientists.⁴³

Figure 7

Declines in these occupations are not just lost employment opportunities for workers, but they are also indicative of a decline in service delivery across sectors. Declines in administrative staff and clerks lead to longer processing times for applications, registrations, licensures, and the myriad front-line and behind-the-scenes services offered by public sector staff. A lack of accountants can lead to delays in payments to contractors, and a decline in IT staff can lead to challenges with customer-facing and backend applications, often critical for applying for benefits, reporting violations, or simply accessing information.

Factors influencing declines in state and local hiring

Factors that contribute to declines in state and local government hiring include slow recovery from furloughs; pandemic-related health and safety concerns; high retirement rates; and insufficient recruitment, training, and retention strategies. These factors lead to employment declines for public sector workers, and understaffed agencies lead to poor service delivery for constituents.

Furloughs

At the start of the pandemic, many state and local governments furloughed (temporarily laid off) employees. Of the more than approximately 1.5 million public sector worker layoffs that took place from March to June 2020,⁴⁵ more than three-quarters were considered “temporary.”⁴⁶ However, many people were out of work for months at a time, or they were forced to furlough a few days per week for several months. In fact, in 2021, the typical unemployed person previously working in public administration experienced 18 weeks of unemployment..⁴⁷ As a result, these workers have struggled financially, and many have been forced to take on debt. In May 2021, nearly 1 in 3 public sector employees had to take on additional debt since the start of the pandemic.⁴⁸

Health and safety concerns

The pandemic also contributed to significant concerns about safety and health at work, and the government agencies meant to keep communities and workers safe during public health crises such as pandemics were dealing with their own health, safety, and capacity issues. In May 2021, nearly 74 percent of surveyed public sector workers said their jobs were at least somewhat risky, and 39 percent of those considered their job extremely risky for COVID-19 exposure.⁴⁹ Moreover, working at reduced capacity forced many short-staffed agency employees to increase their workload without additional compensation. For example, as recently as December 2021, Missouri’s child welfare workers were assigned up to 50 cases per day, more than double their normal caseload.⁵⁰ In the child welfare field, worker burnout can result in high turnover rates that can negatively affect care delivery.⁵¹ These workers were already underpaid, with many starting annual salaries beginning at $32,000.⁵² These effects can also be seen in correctional facilities, where a recent study found that 57 percent of correctional officers reported symptoms of burnout.⁵³ These symptoms are associated with pandemic-related work responsibilities, such as increased workload, increased conflict, lack of support, and isolation practices.⁵⁴ In public health settings, politicization of the COVID-19 pandemic has also led to an increase in threats and intimidation against employees responsible for managing mitigation and response measures.⁵⁵

Retirements are up, but hires are low

Public sector retirements are also on the rise, and new entrants to the workforce are declining. When surveyed, 38 percent of state and local government respondents stated that retirement-eligible employees had accelerated their retirement date, the highest since the survey’s initiation in 2009.⁵⁶ A different survey by MissionSquare Research Institute found that a full 52 percent of employees were considering leaving their jobs, including retiring or switching jobs, citing burnout and low pay.⁵⁷ Retirees are not being replaced by new workers, as applications for state and local government jobs dropped by an alarming 32 percent between fiscal years 2019 and 2021.⁵⁸ This is also visible in opening rates: The hires-per-job opening ratio for state and local government (excluding education) is lower than for all other private sector industries. (see Figure 8)

Figure 8

Limited recruitment, training, and retention strategies

State and local government jobs are notoriously hard to fill even without pandemic-related challenges. While benefits, including pensions, are traditionally a strong recruitment and retention tool,⁵⁹ public sector wages in certain jobs, especially specialized roles requiring higher education, are often less competitive than private sector wages.⁶⁰

Part of this problem—and thus, the solution—lies within state and local hiring processes, hiring requirements, and HR departments. For example, while some private sector employers have reconsidered degree requirements,⁶¹ state and local governments are much more likely to require postsecondary education than the private sector, and in some cases, this may be an unnecessary barrier to entry.⁶² This is particularly salient given persistent racial equity gaps in educational attainment that have perpetuated inequality in American society,⁶³ especially at a time when those with less than a high school diploma are largely left behind in this economic recovery.⁶⁴ While local and state government jobs have been a source of economic security for workers of color, reconsidering educational requirements would also provide opportunities for them to occupy better-paying positions within the workforce. Furthermore, targeted recruitment activities are limited. When asked “what recruitment practices are most successful in reaching qualified candidates,” only 17 percent reported outreach to specific neighborhoods or demographics.⁶⁵ Part of this reflects a lack of HR capacity, a self-perpetuating problem. Many state and local employers lack the HR staff to evaluate their own hiring processes and improve their practices.⁶⁶

Finally, only 22 percent of HR directors reported internships or apprenticeships as recruitment practices that most successfully reach qualified candidates. Registered apprenticeships—more common in sectors such as unionized building trades—are an effective strategy to hire an individual with the intent of training them to the level required to complete a job with mastery.⁶⁷ While apprenticeships are most common in unionized settings, they rarely leverage the often-unionized public sector setting to recruit and train new employees. In other sectors, apprenticeships lead to a well-qualified, innovative, diverse workforce.⁶⁸

First and foremost, state and local governments should prioritize available resources toward hiring and retaining employees in critical roles. At least 75 localities have leveraged the allowable uses of ARP funding to invest some federal relief dollars in government employee wages or hiring, but as evidenced by the jobs numbers, this initial investment has not been sufficient to even return to a pre-pandemic baseline, let alone staff agencies at the level needed to deliver services to constituents. The case is incontrovertible: To avert a crisis in the delivery of public sector services, states and localities must invest in hiring state and local government workers.⁷²

To address challenges with recruitment, states and localities should reconsider how they attract, hire, and train potential applicants. First, state and local governments should review job descriptions that require postsecondary degrees to confirm if those degrees are in fact necessary to perform the functions of the role. Similarly, they should review skill and experience requirements to ensure they align with the desired outcomes for the position. Hiring based on skill and potential rather than credentials can both increase the pool of candidates and ensure the employee is best-suited to the position at hand. In a historic move that should inspire similar action, Maryland recently announced that it will remove degree requirements for thousands of jobs and seek to fill them with individuals who are trained through alternative routes.⁷³ Second, to further broaden and diversify the pool of eligible applicants, HR departments should invest in targeted recruitment efforts, including outreach and partnerships with community-based workforce development programs and public workforce systems (for which state and local governments are often the funders). Finally, HR departments should invest in public sector apprenticeships in industries that are hardest to hire for, such as IT.⁷⁴

Overall, state and local governments need to invest where it will make the biggest difference—take-home pay. While public sector employment can and should offer economic security to employees across the board, there are two scenarios in which investing in wages in the form of salary increases, hazard pay, or recruitment and retention bonuses can make the largest impact. The first of these is for positions with significant competition in the private sector, such as accounting, IT, and nursing. The second is for occupations that offer around or below a living wage, many of which are essential, front-line jobs. Gene Sperling, the White House coordinator for the ARP, has urged mayors to focus ARP spending on recruiting and retaining essential workers.⁷⁵ Governors from Kansas, Missouri, Florida, Virginia, and other states have proposed larger-than-average wage increases and cost-of-living adjustments for state employees.⁷⁶ ARP spending guidelines already define public employees as essential workers eligible for premium pay, but not enough states have leveraged this flexibility to recruit and retain staff.⁷⁷

The state and local government workforce is struggling to regain its pandemic-related job losses, threatening crucial service delivery and the economic security of workers, particularly women and workers of color. The gutting of the state and local government workforce compounds with each recession. Today, the state and local government workforce continues to operate at below 2008 Great Recession levels. Every time state and local governments lose capacity to deliver services, these sectors are less and less equipped to address the next crisis. It is critical for state and local governments to invest in the workforces that maintain the safety and stability of Americans’ daily lives.

The authors would like to thank Christian E. Weller, David Ballard, David Madland, Karla Walter, Lily Roberts, Lorena Roque, Maggie Jo Buchanan, and Kyle Ross for their input on this report.