Why local governments trail private employers in hiring | Mint

Why local governments trail private employers in hiring



  • Slower wage gains and less nimble hiring processes create challenges for many states and municipalities trying to fill job vacancies

U.S. employers have added jobs at a historically robust pace since emerging from the pandemic recession, with a notable exception: state and local governments.

The nation lost about 22 million jobs in March and April 2020, or 14% of the total, when the Covid-19 pandemic first hit the U.S. economy. Total payrolls started growing in May of that year, and by July of this year the overall labor market had more jobs than in February 2020, according to the Labor Department.

Meanwhile, state and local public employers—such as schools, hospitals, libraries and law enforcement agencies—lost about 1.5 million jobs in March through June 2020, or about 7.4% of the total. These payrolls started rising in July that year, and by last month they had 605,000 fewer filled jobs on their payrolls, or 3% less, than in February 2020.

Some of the jobs were eliminated by the public agencies, but much of the deficit reflects their difficulty filling open positions in a hot job market, say economists and recruiters. State and local governments have posted slower wage growth and often have less nimble hiring processes than private employers.

“In a severe labor market crunch, the least flexible employer in the room is the one who gets screwed and that’s the public-sector employer for a number of reasons," said Marianne Wanamaker, an economist at the University of Tennessee. She added that pay increases for government employees often require legislation and need to be negotiated with labor unions.

Wages and salaries for private sector workers rose 9.4% since June 2020, according to the Labor Department. Pay for state and local government workers advanced 4.9% during the period.

There were 932,000 unfilled government jobs at the end of June—847,000 of which were in state and local government—according to the Labor Department. While that higher number is down from a record-high set late last year, it remains more than 120,000 openings higher than the prepandemic level.

The U.S. government didn’t see net job losses in 2020, partly because it hired temporary workers for its U.S. Census efforts that year. Federal payrolls were slightly higher last month than before the pandemic.

Some local governments are taking steps to compete for workers by raising pay, improving benefits and by aggressively advertising vacant positions.

In late 2021, the city of Fort Lauderdale, Fla., had about 200 job openings, mostly in public safety, facility management and park maintenance, said Anthony Roberts, the city’s assistant director of human resources.

The vacancies included about 40 police officer positions, and the city began to advertise them in cities like New York and Chicago during the winter time, he said.

“We posted billboards of the sunny beach with palm trees, kind of like a postcard, then we received over 500 applications from certified police officers," Mr. Roberts said. “With that campaign, we were able to fill all but four vacancies."

The city also relaxed its hiring processes to be able to offer candidates more than just an entry-level salary, which was typically what candidates were offered, he said.

“Experienced people who’ve been in an occupation for a number of years are not going to take an entry-level salary, so we eased up our processes to be able to offer them what the market was demanding," Mr. Roberts said.

State and local governments together accounted for about one in eight U.S. jobs in July—more than manufacturing or retailing.

About half of state and local government employees who quit their jobs said they left because compensation wasn’t competitive, according to a survey conducted in the spring by MissionSquare Research Institute. The study showed governments struggled to hire for positions in nursing, engineering, policing, corrections and for skilled-trade jobs.

Labor demand overall appears to be slightly cooler in the public sector. The rate of job openings as a share of the total government labor force was 4% in June, versus 7% for the private sector.

Governments’ difficulties filling jobs can make it harder to hold on to their workers in a competitive job market.

Steve Wales, a correction officer at the Corrigan Correctional Institution in Uncasville, Conn., which is part of the state Department of Correction, said the facility has been understaffed for years, often causing the correction officers there to feel overworked and burned out. He said the stress became worse during the pandemic because a lot of them had to work mandatory overtime.

“People are just worn out and they’re leaving for what they consider to be better jobs," Mr. Wales said.

A spokeswoman for the state’s Department of Correction said worker shortages were partly due to a high number of staff contracting Covid-19. She said that the department has hired more than 300 new officers this year.

Brian Anderson, president of The Judge Group, a staffing agency, said that the private companies that are his clients improved compensation much sooner than government entities—though that might be shifting.

“The technology sector probably led the charge. They jumped their rates and their salaries significantly, followed by healthcare" Mr. Anderson said. “But in the past three or six months, governments have really caught up." 

This story has been published from a wire agency feed without modifications to the text

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.


Switch to the Mint app for fast and personalized news - Get App