Webinar, June 25, 2020 Public Sector Impacts of the Great Recession - - PowerPoint PPT Presentation

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Webinar, June 25, 2020 Public Sector Impacts of the Great Recession - - PowerPoint PPT Presentation

Feb 27, 2023 5 likes •345 views

1 Webinar, June 25, 2020 Public Sector Impacts of the Great Recession and COVID-19 Panelists: Ken Jacobs, Chair, UC Berkeley Labor Center Sara Hinkley, Specialist, UC Berkeley Labor Center Justin McBride, Graduate Student Researcher, UC

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Webinar, June 25, 2020 Public Sector Impacts of the Great Recession and COVID-19

Panelists: Ken Jacobs, Chair, UC Berkeley Labor Center Sara Hinkley, Specialist, UC Berkeley Labor Center Justin McBride, Graduate Student Researcher, UC Berkeley Labor Center & UCLA

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  • 1. Who works in the public sector
  • 2. Public sector job impacts: Great Recession and COVID-19
  • 3. Possible fiscal impacts in California: estimating and finding information
  • 4. The importance of fiscal policy to economic recovery

Outline

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Ca California employment (thousands)

Ap April 2008 Sh Share Ap April 2013 Sh Share Ap April 2019 Sh Share Ap April 2020 Sh Share Private 12,838

83.4%

12,653

84.0%

14,707

84.8%

12,487

82.9%

Government 2,562

16.6%

2,412

16.0%

2,646

15.2%

2,574

17.1%

Federal 248

1.6%

248

1.6%

247

1.4%

253

1.7%

State Education 230

1.5%

238

1.6%

274

1.6%

264

1.7%

State Non-Education 270

1.8%

251

1.7%

275

1.6%

280

1.9%

Local Education 1,003

6.5%

930

6.2%

1,028

5.9%

979

6.5%

Local Non-Education 812

5.3%

745

4.9%

822

4.7%

799

5.3%

Total nonfarm 15,401 15,065 17,352 15,061

Source: BLS Current Employment Statistics, unadjusted

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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Share of California public employment, 2007-2019

Local Education Local Excluding Education State Education State Excluding Education Federal

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0% 5% 10% 15% 20% 2 2 1 2 2 2 3 2 4 2 5 2 6 2 7 2 8 2 9 2 1 2 1 1 2 1 2 2 1 3 2 1 4 2 1 5 2 1 6 2 1 7 2 1 8 2 1 9

Share of California nonfarm employment, 2000-2019

All government Federal State Local

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All numbered figures are from our June 22 Data Brief Public Sector Impacts of the Great Recession and COVID-19

Fi Figure 10a. Share of California workers in public sector, by race Private Public White 83% 17% Black 79% 21% Hispanic 88% 12% Asian 86% 14% Other 81% 19% All races 85% 15%

Source: Author's analysis of CEPR Current Population Survey Outgoing Rotation Groups, 2007-2019. Private sector excludes self-employed and unpaid workers.

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Fi Figure 10b. Share of California workers in racial groups, by sector Private Public All jobs Local State Federal White 36% 44% 37% 45% 44% 37% Black 6% 9% 6% 8% 8% 13% Hispanic 40% 30% 38% 32% 30% 25% Asian 18% 16% 17% 14% 17% 22% Other 1% 1% 1% 1% 1% 3% All races 100% 100% 100% 100% 100% 100%

Source: Author's analysis of CEPR Current Population Survey Outgoing Rotation Groups, 2007-2019. Private sector excludes self-employed and unpaid workers.

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Public sector job impacts

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0.95 1.00 1.05 1.10 1.15 Dec 2007 Jun 2008 Dec 2008 Jun 2009 Dec 2009 Jun 2010 Dec 2010 Jun 2011 Dec 2011 Jun 2012 Dec 2012 Jun 2013 Dec 2013 Jun 2014 Dec 2014 Jun 2015 Dec 2015 Jun 2016 Dec 2016 Jun 2017 Dec 2017 Jun 2018 Dec 2018 Jun 2019 Dec 2019 Ratio of December 2007 employment

Total private Federal government State government Local government Population

Source: BLS Current Employment Statistics, monthly, seasonally adjusted

Figure 2. United Figure 2. United States employment, Dec 2007 States employment, Dec 2007-June 2020 June 2020

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0.90 0.95 1.00 1.05 1.10 1.15 1.20 Dec 2007 Jun 2008 Dec 2008 Jun 2009 Dec 2009 Jun 2010 Dec 2010 Jun 2011 Dec 2011 Jun 2012 Dec 2012 Jun 2013 Dec 2013 Jun 2014 Dec 2014 Jun 2015 Dec 2015 Jun 2016 Dec 2016 Jun 2017 Dec 2017 Jun 2018 Dec 2018 Jun 2019 Dec 2019 Ratio of December 2007 empoyment

Total Private Federal Government State Government Local Government Population

Source: BLS Current Employment Statistics, monthly, seasonally adjusted

Figure 3. California Figure 3. California employment, Dec 2007 employment, Dec 2007-May 2020 May 2020

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2,000 2,100 2,200 2,300 2,400 2,500 Dec 2007 Aug 2008 Apr 2009 Dec 2009 Aug 2010 Apr 2011 Dec 2011 Aug 2012 Apr 2013 Dec 2013 Aug 2014 Apr 2015 Dec 2015 Aug 2016 Apr 2017 Dec 2017 Aug 2018 Apr 2019 Dec 2019

Fi Figu gure e 4a. California state e and local em employmen ent (D (Dec 2007-Ma May 2020)

Employment predicted by population growth Source: BLS Current Employment Statistics, seasonally adjusted. Employment is in thousands.

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13% 14% 15% 16% Dec 2007 Aug 2008 Apr 2009 Dec 2009 Aug 2010 Apr 2011 Dec 2011 Aug 2012 Apr 2013 Dec 2013 Aug 2014 Apr 2015 Dec 2015 Aug 2016 Apr 2017 Dec 2017 Aug 2018 Apr 2019 Dec 2019

Fi Figu gure e 4b. California state e and local em employmen ent as as shar are of total al nonfar arm (Dec c 20 2007-Ma May 2020)

Source: BLS Current Employment Statistics, seasonally adjusted

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0.90 0.95 1.00 1.05 1.10 1.15 1.20 1.25 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Ratio of 2007 annual employment

Figure 7. Annual California employment, 2007-2019

Federal State Education State Excluding Education Local Education Local Excluding Education Private

Source: Author's analysis of BLS Current Employment Statistics

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0.90 0.95 1.00 1.05 1.10 1.15 1.20 1.25 2000 2001 2002 2003 2004 2005 2006 2007 Ratio of 2000 annual employment

Figure 8. Annual California employment 2000-2007

Federal State Education State Excluding Education Local Education Local Excluding Education Private

Source: Author's analysis of BLS Current Employment Statistics

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200,000 220,000 240,000 260,000 280,000 300,000 320,000 340,000 360,000 380,000 2 7

  • 8

2 8

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2 9

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Figur Figure 9. California K e 9. California K-12 public school emplo 12 public school employment, 2007 yment, 2007-2019 2019

Classified staff Classified FTE All certificated Teachers

Source: California Department of Education Note that CDE changed its methods for tracking classified employment in 2013-14

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COVID-19: Job loss since February 2020

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Fi Figure 11a. United States employment, Fe February-May 2020

Feb 2020 Mar 2020 Apr 2020 May 2020 Total Rate Total nonfarm 152,463 151,090 130,403 132,912 (19,551)

  • 13%

Total private 129,718 128,362 108,638 111,732 (17,986)

  • 14%

Total govt 22,745 22,728 21,765 21,180 (1,565)

  • 7%

Federal govt 2,867 2,886 2,887 2,873 6 0% State govt 5,199 5,162 4,995 4,911 (288)

  • 6%

Local govt 14,679 14,680 13,883 13,396 (1,283)

  • 9%

Fi Figure 11b. California employment, Fe February-May 2020

Feb 2020 Mar 2020 Apr 2020 May 2020 Total Rate Total nonfarm 17,604.5 17,394.0 14,979.0 15120.6 (2,483.9)

  • 14%

Total private 14,972.7 14,760.5 12,437.2 12674.6 (2,298.1)

  • 15%

Total govt 2,631.8 2,633.5 2,541.8 2446 (185.8)

  • 7%

Federal govt 251.7 252.2 252.5 252.5 0.8 0% State govt 550.3 551.0 539.2 515.6 (34.7)

  • 6%

Local govt 1,829.8 1,830.3 1,750.1 1677.9 (151.9)

  • 8%

Employment is in thousands. May 2020 numbers are preliminary. Source: BLS Current Employment Statistics Feb-May job loss Feb-May job loss

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2,000 2,100 2,200 2,300 2,400 2,500 Dec 2007 Aug 2008 Apr 2009 Dec 2009 Aug 2010 Apr 2011 Dec 2011 Aug 2012 Apr 2013 Dec 2013 Aug 2014 Apr 2015 Dec 2015 Aug 2016 Apr 2017 Dec 2017 Aug 2018 Apr 2019 Dec 2019

Fi Figu gure e 4a. California state e and local em employmen ent (D (Dec 2007-Ma May 2020)

Employment predicted by population growth Source: BLS Current Employment Statistics, seasonally adjusted. Employment is in thousands.

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By end of May 2020, dropped below 2014 levels

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Fiscal impacts of COVID-19

  • Estimated $500 billion shortfall nationally, of state and

local revenues through about 2022

  • National League of Cities (June 23) estimates a $360 billion

shortfall for cities alone

  • 74% of cities already making cuts
  • 65% of cities forced to delay or cancel capital projects

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State revenues in California

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$70,000 $80,000 $90,000 $100,000 $110,000 $120,000 $130,000 $140,000 $150,000 $160,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

California gener California general fund tax c al fund tax collections, 2007

  • llections, 2007-2020

2020

Nominal dollars 2007 dollars Source: California Department of Finance

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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2 2 1 2 2 2 3 2 4 2 5 2 6 2 7 2 8 2 9 2 1 2 1 1 2 1 2 2 1 3 2 1 4 2 1 5 2 1 6 2 1 7

St State tax revenue nues in n Californi nia, 2000-20 2017

Total sales / gross receipts Individual income Corporate net income Licenses + other Property taxes

Source: The Government Finance Database: A Common Resource for Quantitative Research in Public Financial Analysis.

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$- $10,000,000 $20,000,000 $30,000,000 $40,000,000 $50,000,000 $60,000,000 $70,000,000 $80,000,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

St State tax revenue nues in n Californi nia, 2007-20 2017

Total sales / gross receipts Individual income Corporate net income Licenses + other Property taxes

$- $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

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Local revenues in California

  • Property taxes
  • Transit occupancy taxes
  • Sales taxes
  • Licenses and fees
  • Parcel taxes
  • Intergovernmental funds

(state and federal)

  • Utility user fees

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$0 $10,000,000 $20,000,000 $30,000,000 $40,000,000 $50,000,000 $60,000,000 $70,000,000 $80,000,000 $90,000,000 $100,000,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Ca California local government revenue, 2007 007-20 2017 7 (t (thousa sands, s, in 2007 dollars) rs) Property Sales & gross receipts Federal intergovernmental State intergovernmental Charges and misc. general revenue

Source: Census Bureau Annual Survey of State and Local Government Finances

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Sources:

  • Adopted budgets, CAFRs
  • Updated projections of actuals, throughout the year
  • California State Controller and Auditor data: for comparing jurisdictions
  • Census of Governments: State and Local Government Finance

Researching local budgets

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  • Revenues: what is the local revenue mix?

Which revenue sources have been impacted by downturn? What are revenue estimates based on? How does volatility compare? What revenue options exist?

  • Expenditures: how do spending priorities

compare to previous years or similar jurisdictions? Where are spending cuts being proposed?

  • Debt: what local laws govern borrowing?

How do debt levels & spending compare? What capacity for borrowing exists? What are local credit ratings?

  • Reserves: what local reserves exist? What

does local policy require? How are reserves accessible in emergencies?

Questions to ask about local budgets

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California’s fiscal responses to the Great Recession

  • Fee increases (especially higher

education)

  • Sales tax increases (state and local)
  • State income tax increases (including

Proposition 30)

  • Parcel taxes (especially school districts)
  • State program cuts (Redevelopment

Agencies, enterprise zones)

  • Statewide furloughs and layoffs
  • Local spending cuts
  • Borrowing from special funds
  • Movement to build up better reserves
  • Infrastructure backlog
  • Municipal bankruptcy

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We need to avoid another slow and unequal recovery

  • Weak and slow recovery after the Great Recession (underemployment, stagnant wages,

extended unemployment)

  • Public sector recovery weaker than post-2000
  • Public sector employment lagged well behind population growth

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Why the public sector matters to economic recovery

  • Public sector has high employment and income multipliers
  • Public infrastructure is necessary for addressing crises
  • Public sector one of the strongest pathways to middle-class wages for Black workers

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Em Employment, income, and tax impacts of loss of 100,000 state and local jobs in California

Direct Induced* Total Employment (100,000.00) (50,634) (150,634) Income $(10,405,477,820) $(3,114,818,395) (13,520,296,215) $ Ta Tax impacts Federal taxes (2,058,238,192) $ (670,966,096) $ Jobs multiplier: State and local taxes (429,415,753) $ (617,583,399) $ 1.51 Source: IMPLAN, 2018 impacts based on 2018 dollars *IMPLAN does not model indirect impacts of government sector employment and payroll

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For more resources on COVID-19 visit: laborcenter.berkeley.edu

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