For Immediate Release:
September 23, 2013

Contact: Eric Lupher,
Jeffrey Guilfoyle
734.542.8001

or Craig Thiel
517.485.9444

CRC Report Documents Long-term Slide in Local Government Employment

Since the beginning of the 2001 recession, Michigan local government employment losses have exceeded private sector losses in percentage terms. Michigan’s Single-State Recession and Its Effects on Public Employment, a new report by the Citizens Research Council of Michigan, documents the changes and likely causes of public sector job losses.

Michigan’s overall job picture is improving, albeit at a moderate pace. Michigan’s total non-farm employment has increased by over six percent since the end of the Great Recession in June 2009. This growth has been driven largely by job gains in the private sector, particularly in key industries such as manufacturing and healthcare. At the same time, Michigan’s public sector continues to shrink, fueled by significant local government job losses.

Eric Lupher, CRC’s Director of Local Affairs, noted that although there have been losses in some areas of state government employment, job losses in local government have been widespread across many occupations.

Job losses in the K-12 education arena have been significant. This sub-sector, which comprises over 55 percent of local government employment, lost nearly 16 percent of its jobs between 2000 and 2011. Statewide enrollment declines and moves toward privatizing certain ancillary services likely contributed to the reduction. Another large segment, public safety, is down nearly 21 percent over the same period.

Public employment has increased for higher education, with both public 4-year universities and community colleges showing increases. The number of higher education jobs increased by nearly 23 percent during Michigan’s economic downturn, largely in response to ballooning enrollments and the ability of schools to tap tuition and other revenue sources when faced with reduced state aid.

Commenting on the causes of the job losses at the local level, Mr. Lupher stated, “The contraction of the local government sector is a consequence of the housing market collapse, state policy decisions that impacted local government revenue, and, to some extent, privatization of local government services.” He concluded that “employment declines are likely to continue among local governments unless policy changes are adopted that allow local governments to realize increased revenues, either own-source funds or state-shared dollars.”

CRC’s report is available at no cost on the Citizens Research Council’s website, www.crcmich.org.

Founded in 1916, CRC works to improve government in Michigan. The organization provides factual, unbiased, independent information concerning significant issues of state and local government organization, policy, and finance. By delivery of this information to policymakers and citizens, CRC aims to ensure sound and rational public policy formation in Michigan. For more information, visit www.crcmich.org.

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