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

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 Berkeley Labor Center & UCLA

2 Outline 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

3 Ca California employment (thousands) Ap April 2008 Sh Share Ap April 2013 Sh Share Ap April 2019 Sh Share Ap April 2020 Sh Share 83.4% 84.0% 84.8% 82.9% Private 12,838 12,653 14,707 12,487 16.6% 16.0% 15.2% 17.1% Government 2,562 2,412 2,646 2,574 1.6% 1.6% 1.4% 1.7% Federal 248 248 247 253 1.5% 1.6% 1.6% 1.7% State Education 230 238 274 264 1.8% 1.7% 1.6% 1.9% State Non-Education 270 251 275 280 6.5% 6.2% 5.9% 6.5% Local Education 1,003 930 1,028 979 5.3% 4.9% 4.7% 5.3% Local Non-Education 812 745 822 799 Total nonfarm 15,401 15,065 17,352 15,061 Source: BLS Current Employment Statistics, unadjusted

4 Share of California public employment, 2007-2019 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Local Education Local Excluding Education State Education State Excluding Education Federal

5 Share of California nonfarm employment, 2000-2019 20% 15% 10% 5% 0% 4 6 9 8 4 6 8 9 0 1 2 3 5 7 0 1 2 7 3 5 0 1 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 All government Federal State Local

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

7 Figure 10b. Share of California workers in racial groups, by sector Fi 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.

8 Public sector job impacts

Ratio of December 2007 employment Figure 2. United States employment, Dec 2007 Figure 2. United 0.95 1.00 1.05 1.10 Source: BLS Current Employment Statistics, monthly, seasonally adjusted 1.15 Dec 2007 Jun 2008 Dec 2008 Jun 2009 States employment, Dec 2007-June 2020 Dec 2009 Jun 2010 Dec 2010 Jun 2011 Dec 2011 Jun 2012 Dec 2012 Jun 2013 Dec 2013 Jun 2014 Population Local government State government Federal government Total private June 2020 Dec 2014 Jun 2015 Dec 2015 Jun 2016 Dec 2016 Jun 2017 Dec 2017 Jun 2018 Dec 2018 Jun 2019 Dec 2019 9

Ratio of December 2007 empoyment Figure 3. California employment, Dec 2007 Figure 3. California 0.90 Source: BLS Current Employment Statistics, monthly, seasonally adjusted 0.95 1.00 1.20 1.05 1.10 1.15 Dec 2007 Jun 2008 Dec 2008 Jun 2009 Dec 2009 employment, Dec 2007-May 2020 Jun 2010 Dec 2010 Jun 2011 Dec 2011 Jun 2012 Dec 2012 Jun 2013 Dec 2013 May 2020 Jun 2014 Dec 2014 Population Local Government State Government Federal Government Total Private Jun 2015 Dec 2015 Jun 2016 Dec 2016 Jun 2017 Dec 2017 Jun 2018 Dec 2018 Jun 2019 Dec 2019 10

11 Figu Fi gure e 4a. California state e and local em employmen ent (D (Dec 2007-Ma May 2020) 2,500 Employment predicted by 2,400 population growth 2,300 2,200 2,100 2,000 Dec 2007 Apr 2009 Dec 2009 Aug 2012 Apr 2013 Dec 2013 Aug 2014 Apr 2015 Dec 2015 Aug 2016 Apr 2017 Dec 2017 Apr 2019 Dec 2019 Aug 2008 Aug 2010 Apr 2011 Dec 2011 Aug 2018 Source: BLS Current Employment Statistics, seasonally adjusted. Employment is in thousands.

12 Figu Fi 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) 16% 15% 14% 13% Apr 2009 Aug 2010 Apr 2013 Aug 2014 Apr 2015 Aug 2016 Apr 2019 Aug 2008 Apr 2011 Dec 2011 Aug 2018 Dec 2007 Aug 2012 Apr 2017 Dec 2017 Dec 2009 Dec 2013 Dec 2015 Dec 2019 Source: BLS Current Employment Statistics, seasonally adjusted

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15 Figure 7. Annual California employment, 2007-2019 1.25 Federal State Education 1.20 State Excluding Education Local Education Ratio of 2007 annual employment 1.15 Local Excluding Education Private 1.10 1.05 1.00 0.95 0.90 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Source: Author's analysis of BLS Current Employment Statistics

Figure 8. Annual California employment 2000-2007 16 1.25 Federal State Education 1.20 State Excluding Education Ratio of 2000 annual employment Local Education 1.15 Local Excluding Education Private 1.10 1.05 1.00 0.95 0.90 2000 2001 2002 2003 2004 2005 2006 2007 Source: Author's analysis of BLS Current Employment Statistics

17 Figure 9. California K Figur e 9. California K-12 public school emplo 12 public school employment, 2007 yment, 2007-2019 2019 380,000 360,000 340,000 320,000 300,000 280,000 Classified staff 260,000 Classified FTE 240,000 All certificated 220,000 200,000 Teachers 0 8 2 3 4 5 6 7 9 8 9 1 1 1 1 1 1 1 0 0 1 1 1 1 - - - - - - - - - - 0 1 2 - 4 6 8 - 7 9 3 5 7 1 8 1 1 1 1 1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 2 0 2 0 2 2 2 2 2 2 2 0 2 2 2 Source: California Department of Education Note that CDE changed its methods for tracking classified employment in 2013-14

18 COVID-19: Job loss since February 2020

19 Figure 11a. United States employment, Fe Fi February-May 2020 Feb-May job loss 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% Figure 11b. California employment, Fe Fi February-May 2020 Feb-May job loss 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

20 Fi Figu gure e 4a. California state e and local em employmen ent (Dec 2007-Ma (D May 2020) 2,500 Employment predicted by 2,400 population growth By end of May 2020, dropped 2,300 below 2014 levels 2,200 2,100 2,000 Dec 2007 Apr 2009 Dec 2009 Aug 2012 Apr 2013 Dec 2013 Aug 2014 Apr 2015 Dec 2015 Aug 2016 Apr 2017 Dec 2017 Apr 2019 Dec 2019 Aug 2008 Aug 2010 Apr 2011 Dec 2011 Aug 2018 Source: BLS Current Employment Statistics, seasonally adjusted. Employment is in thousands.

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 • 21

State revenues in California 22

23 California gener California general fund tax c al fund tax collections, 2007 ollections, 2007-2020 2020 $160,000 $150,000 $140,000 Nominal dollars $130,000 2007 dollars $120,000 $110,000 $100,000 $90,000 $80,000 $70,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: California Department of Finance

24 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 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1 2 7 0 1 3 4 5 6 9 2 3 5 7 0 8 4 6 0 1 0 0 0 0 1 1 1 1 0 0 0 0 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 Source: The Government Finance Database: A Common Resource for Quantitative Research in Public Financial Analysis.