How Local Government Hiring Addresses Growing Wage Gap

No comments

Public sector employment has consequences for the quality of economic recovery since the majority of local government jobs are mid-wage.

Boston-Police-HiringGetty Images
It’s no secret that although national employment is on the upswing, the type of job growth we’re experiencing is troublesome. Low-wage jobs are growing more quickly than high-wage jobs, with mid-wage jobs trailing even further behind. In fact, while lower-wage industries constituted only 22 percent of recession losses, they are responsible for 44 percent of recovery growth.

As I first alluded to back in 2012, employment in the public sector has consequences for the quality of anticipated economic recovery since the majority of local government jobs are mid-wage. Throughout the recession, many cities implemented some combination of personnel and workforce-related cuts, including hiring freezes and layoffs, in an effort to reduce costs. This resulted in the loss of hundreds of thousands of mid-wage jobs in public safety, public works, parks and recreation, public health, social services, transportation, and administration, among other municipal services.

As budgets stabilize, though, local government hiring is picking up. In fact, cities are adding jobs at a faster clip than their counterparts in state and federal government, with the majority of recent gains in overall government employment at the local level. Healthier municipal budgets and a stronger workforce means not only more mid-wage city workers, but also better prospects for mid-wage employment in the private sector.

According to the Economic Policy Institute, increased government spending supports private sector jobs—either through contracting or due to increased demand for job-specific supplies (privately-produced automobiles to supply police officers, for example). Local government investment in transportation, water, sewers and communications infrastructure also promotes private sector growth by reducing costs and creating opportunities for additional private sector investments, such as those in workforce.

Getting Back to Business

Strengthening municipal operations through restoring services and the workforce is proving to be a priority for cities. Our research on mayors’ annual State of the City speeches found that 83 percent of speeches touched on Budget/Finance related issues and 35 percent devoted “significant coverage” to the topic. These speeches illustrate that mayors across the country recognize their employees as valuable assets and worthwhile investments for the positive development of their communities.

SOTC-Finance 9-26-14-08In San Jose, for example, Mayor Chuck Reed said,

“Times have been tough, but we have turned the corner and are slowly beginning to restore services. We are training new police recruits and hiring community service officers. We were able to keep 49 fire fighters who had been paid for with federal grants that expired. We opened four new neighborhood libraries that sat vacant for years. We turned streetlights back on.

We’ve also begun to restore pay to our police officers and other city employees. We know that we’ve lost a lot of good people because of the pay cuts – often to cities that are wealthier or haven’t yet felt the impact of their unfunded pension liabilities. It will take time to restore pay to the levels we want (and our employees deserve), but this is an important step in keeping a quality workforce.”

Mayor Steve Williams, Huntington, WV noted,

“Our employees, our single greatest resource, have not had a raise since 2008. In many years, it was an easy decision to say we could not afford a pay raise. This is not one of those years. The budget is tight, but we cannot afford to not provide our employees a pay raise. Therefore, I am recommending a 3 percent across-the-board pay raise for all bargaining unit employees and administrative personnel.”

The words of mayors Reed and Williams are indicative of others, and signal the value of our municipal workforce not only to quality services, but to addressing the critical issue of closing the middle-wage gap.

This post is the third blog in NLC’s State of the Cities project.

christy-mcfarlandAbout the Author: Christiana K. McFarland is NLC’s Research Director. Follow Christy on Twitter at @ckmcfarland.