Preliminary employment totals for 2011 suggest that Michigan finally ended its long streak of annual employment declines.  Michigan lost jobs for 10 consecutive years, before finally adding 61,000 jobs in 2011.  Much of this decline was driven by significant job losses in the private sector.  Michigan’s private sector shed 769,000 jobs between 2001 and 2010, a 19.3 percent employment decline.  In 2011, Michigan’s private sector added 76,900 jobs, a 2.4 percent increase.

Michigan has also lost jobs in many sectors of the government.  Last week CRC reported on employment declines in state government.  Many other sectors of government have also seen significant declines, including K-12 education. 

Employment in local K-12 public schools is classified by the U.S. Bureau of Labor Statistics as “Local Government Elementary and Secondary.”  Employment in this sector peaked in 2003 at 250,900 jobs.  Since 2003, K-12 education has seen significant employment declines, with employment in 2011 averaging just 189,900.

In fact, in percentage terms, the decline in K-12 employment exceeds the decline in the private sector.  In 2011, private sector employment averaged 17.3 percent below the peak employment level of 2000.  K-12 employment did not peak until 2003, but 2011 employment averaged 24.3 percent below that level (and 22.3 percent below the 2000 level).  In addition, while private sector employment increased by 2.4 percent in 2011, jobs losses for K-12 continued with employment falling by 3.2 percent. 

Much of the employment decline is presumably due to budget cuts made by local school districts that are struggling with reductions in state aid and rising health and retirement costs.  Part of the K-12 employment decline can be explained by a drop in the number of pupils.  The number of pupils in Michigan peaked in 2003 at 1.71 million.  Between 2003 and 2011, the number of pupils declined by 8.5 percent to 1.57 million.  In addition, if a school district replaces employees of the district with private sector employees, this shows up in the data as a drop in K-12 employment even though these individuals may still be working in a school.  An example of this would be a school district contracting with a private firm to provide food service.  Under this scenario, K-12 employment would drop and private sector employment would increase. 

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1 Comment

    • Nicely done here, and to connect the dots, we must realize the vicious cycle this dynamic has induced relative to rising retirement rates, which CRC reported on last week.

      As more employees are reduced or replaced with contracted staff, the worse the underfunding of MPSERS, which drives up the rate. So K12 districts are now realizing there’s no escaping this debt.

      This is not an argument against privatization, but merely an observation. MPSERS will continue to be the biggest problem facing K12 budgets for years to come.

      Brendan Walsh
      February 25, 2012, @ 9:46 am Reply

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