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Thursday, July 1, 2010

Private-sector jobs are gone, but government is hiring

A couple of news stories today paint an intriguing picture of employment trends in the Portland metropolitan area. One covers private-sector employment, and the other covers employment overall. Put together, they seem to demonstrate that while private-sector employment is dwindling, other employment -- which we assume to mean public-sector employment -- is in fact growing.

Let's start with the private-sector first. The Portland metropolitan area has lost 88,800 private-sector jobs in the last two years, according to these statistics from the federal Labor Department. That's 9.94% of the private-sector employment in the area. May 2010 metro area private-sector employment is estimated at 804,300, down from 893,100 in May 2008.

Over the last decade, the private-sector job loss in the area has been 32,300, or 3.86%. On a percentage basis, that's 36th worst on the list of 100 largest metropolitan areas in the country.

In the last year, private-sector employment in the area declined by 21,700 jobs, or 2.6%.

But then there are the overall nonfarm employment statistics, which are over here. According to those numbers, in the past year overall employment in the area in the area was down 20,100, or 2.1%. But if private-sector employment is down 21,700, while overall employment is down 20,100, one could reasonably conclude that the public sector actually added 1,600 jobs.

Or maybe I'm misinterpreting unfamiliar data sets. Here they are in a table -- readers, help me out if I'm missing something:

DatePrivate-sectorOverall nonfarmDifference (public sector)
May 2010804,300958,500154,200
May 2009826,000978,600152,600
Increase (decrease) 2009-2010(21,700)(20,100)1,600

The figures also show that while Portland is being hammered economically, Bend and Corvallis have had an even rougher year, each posting a 2.9% overall employment decline since May 2009. Funny thing, though -- Salem, the state capital, lost only 0.4% of its jobs over that year. Eugene was at 0.7%, and Medford 1.2%.

Comments (23)

This is pretty much what happens in every economic downturn: private sector sheds jobs, government hires. In the upturn, private sector starts hiring; government starts shedding jobs. Unfortunately, government never sheds anything close to the number they added.

Welcome to the new economy.

"government never sheds anything close to the number they added."

I'd have to disagree. Once things get good govt hires even faster. cf. 2007 when Kulongoski got a big upside in revenue. Govt only lays off if they really, really, realy have to.

Wouldn't you expect some of that as the result of a fiscal stimulus? If so, would it be a bad thing in itself?

I've noticed the return of a scam I haven't seen in twenty years: the services that promise to assist the desperately unemployed with getting government positions for a fee. The ongoing mantra is that government jobs are stable, easy, and ageism-free, so you see a lot of people in their fifties and sixties paying for these services. Naturally, they're about as above-board as those "apartment search" services in Portland in the Nineties, that would charge a nonrefundable $70 for a list of places that hadn't had a rental vacancy in three years.

It is indeed troubling.

The bottom 20% of American's are struggling big time, and nobody seems to want to do anything about it.

But as government adds jobs the private sector is turning out THIS

So there is plenty of money out there.
It's just the same old story, the rich get richer and the poor die.

The history of the world in one sentence.

Would this May 2010 public sector number be inflated by the federal "census worker" temporary jobs?

Yes it does include Census data.

But Randy "Dear Father" Leonard has bloated the PWB with people who need favors, and a whole lot of bloggers. PR people writing articles for neighborhood papers getting the "word out" about how great they are at PWB.

I do a lot of economic research and can provide some insight here. In bad recessions, historically, state & local government job counts have declined. The last bad recession was in the early 1980s. In soft recessions, state and local government jobs grow slightly. In all recessions, pretty much by definition, private jobs are lost.

In this recession, obviously a very bad recession, we have lost many private sector jobs. But what is an anomaly is that S&L jobs are up.

In the last dozen years, Multnomah has seen private job declines. Most other counties, including those in our suburbs, have seen private job increases. It is a big discrepancy.

Growth and security of government jobs (local and state, not federal) depends on an economy's ability to foster private sector job growth. Unless you are a bicycle shop, the city has not done much fostering.

I took a quick look at data from 2001 to 2009. This is data for Pdx/Vancouver Metro area. Data is from the state.

Over that time private sector lost 10,100 jobs or 1.2% loss.

From 2001 to 2009, the total public sector grew by 16,800 or 12.8% gain. LOCAL government grew by 13.8%.

Local government grew in all of those years except 2003. It grew fastest in 2007 and 2008, and even grew in 2009 by 700 jobs.

The government most certainly does NOT shed jobs in "good times."

You need to be somewhat careful with comparing employment statistics, as the definitions vary widely. This info is easily available for the Portland metro area at the following link:

http://www.qualityinfo.org/pubs/llt/06-10/0610-pdx.pdf

Your general observation appears to be supported by the most recent data. Private sector payroll employment dropped 23,000 since last year, while Government employment added 100 jobs net. Oddly, this included an 1,100 addition to local education.

I took a quick look at data from 2001 to 2009. This is data for Pdx/Vancouver Metro area. Data is from the state.

Interesting stuff. Do you have a link to that?

It's the same link that Pete gave above. Click on "Employment and Labor Tools" in the lefthand column. Have to play around with it for awhile, but the data is there.

I do a lot of economic research and can provide some insight here. In bad recessions, historically, state & local government job counts have declined. The last bad recession was in the early 1980s. In soft recessions, state and local government jobs grow slightly. In all recessions, pretty much by definition, private jobs are lost.

In this recession, obviously a very bad recession, we have lost many private sector jobs. But what is an anomaly is that S&L jobs are up.

I'd like some sources on this claim because this is completely contradicted by this chart from the NY Times:

http://www.nytimes.com/2009/08/20/us/20states.html?_r=1&partner=rss&emc=rss

It is not unusual for government jobs to grow during recessions because governments are trying to reduce unemployment and put money into the economy.

A better question is whether the jobs are productive or not. For instance, the stimulus bill created 10's thousands of trail maintenance jobs for students at national parks and forests, which seems to me a very reasonable use of stimulus funds.

As usual, the feds and the state use slightly different numbers. The fed report shows Portland metro overall nonfarm employment in April '10 as 953,900. The state gives it as 954,600.

Actually, another version of the state report confirms my numbers exactly.

Who makes the money?

Private citizens.

Public, government, union, et al, would not exist without 'em. Tax $0 income and you get $0.

Explain how this is incorrect. Take all day.

You better be good.

The last time we had a recession this steep was 1982. During that recession, Government employment dropped along with, although not as rapidly as private sector employment.

Not long after millions of new jobs were added to payrolls (1983 and 1984). GDP caught on fire, pushing up against ten percent annualized growth rates in late 1983 and early 1984.

Actually, another version of the state report confirms my numbers exactly.

Per this report, local government dropped 600 employees in the Portland MSA from May 09 to May 10, and the federal government added 1800. What federal agency would have added that many in the past year?

Robert @4:09 - if you're game, I'd like to pick your brain for a few minutes. Send me an email if so - Lkotan@yahoo.com

It would be nice to have even more data to work with. As I recall the Portland Police Bureau has not added any patrol people and the Portland Public Schools have been losing students. So which departments have been losing and which have been adding. Are they in Portland, Beaverton or other locations?

So there are all sorts of private sector segments where investors are just aching to spend, if local government would only "foster"? What are they? And how much corporate welfare does "fostering" require?

Paul g -

The New York Times article you site only looks at the current recession and federal stimulus dollars paid local government to keep employment up. In past bad recessions, state & local job counts dropped.

While it is true some government services are in higher demand during recessions (employment department and university jobs, for example) others are in lower demand (DMV, permit offices, revenue, and even foster care). There is less demand for infrastructure expansions because fewer private projects going on. Net, S&L job demand should be down, albeit slightly.

As I recall the Portland Police Bureau has not added any patrol people and the Portland Public Schools have been losing students.

At least with regard to the Portland Public Schools, you recall incorrectly. PPS has gained students in each of the past two years. The 2010-11 estimates (which are only rough guesses at this point) are that they will be at about the same level as in 2009-10. The ADMr (weighted FTE student count) numbers for the past three years, according to ODE:

2007-08: 42453.1
2008-09: 42461.6
2009-10: 43225.0





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