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Private and public jobs

We’ve had fairly good job reports in both the nation and North Carolina during the past couple of months.  However, one big negative sticks out — the decline in public-sector jobs.  N.C. State University economist Mike Walden explains what’s going on.

“We would call this, economists would, counter cyclical policy. That is, during the depth of the recession what we … try to do in terms of the policy while private-sector jobs were falling was to sort of cushion those by increasing public-sector jobs. And you can see this in the data.

“And, of course, this resulted, for example, from the stimulus plan. And that was passed in early 2009.  So private-sector jobs are going down, and the government tried to counter that by increasing public-sector jobs.

“Now, over about the last year and a half, we’ve actually had private-sector jobs coming back, slowly, but they’re coming back. And so we don’t need that cushion, and so we’ve not had a renewal, for example, of the stimulus plan. And because government revenues somewhat lag private revenues, many states and localities are actually now seeing some revenue issues, and they’re having to cut public-sector jobs.

“And so the good news here, of course, is that there’s some private-sector jobs increasing.  Obviously the bad news, if you’re someone in a public-sector job — government job — you may not have that in the future.

“But the big picture here is this is how the government tries to what we call lean against the business cycle.  When the business cycle and the private sector is going gangbusters, there’s not as much concern about pumping up public jobs to cushion that, whereas when public jobs, I’m sorry, private jobs are going down and we’re in a recession, then the idea is you try to pump the government up to again lean against that cycle.”