Quarterly Jobs Report: Employment Surges in 2016 with Local Variation

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Each quarter, NLC’s Center for City Solutions and Applied Research analyzes local government employment data from the Bureau of Labor Statistics.

Local governments are on a hiring spree, at least according to data from the U.S. Bureau of Labor Statistics. City and county governments added 12,800 jobs in March. A total of 41,900 jobs have been added in the first quarter of 2016. These data are a welcomed sign of a local recovery that is finally taking hold. However, national jobs numbers tend to smooth over complexities at the local level.

Take Cleveland, for example, where a recent surge in hiring is indicative of a strategy needed to accommodate continued fiscal constraint. “The city delays filling jobs in the third, fourth and early first quarters until we have the budget approved by Council,” said Tracey Nichols, Director of Economic Development.  “As a result, employment always spikes around February and March.”

Changes in the local government workforce are often the result of a complex set of factors including budget cycles, employee-related cost pressures, service needs and strength of the overall economy.

“We’re not hiring a lot of people,” says Kansas City, Missouri, City Manager Troy Schulte. Kansas City has not fully recovered from the Great Recession, leaving the city to be very methodical about hiring people back. City revenues have grown only two percent since the downturn.

Schulte said his city has been especially slow to hire professional positions such as attorneys and engineers. Tasks have been restructured so that contractors and temporary workers are able to deliver essential city services.

Schulte worries hiring will only become more difficult due to restrictions placed on city finances by the state government. “I have a state legislature in Missouri that has made multiple attempts to eliminate the one percent earning tax,” he said referring to a local option income tax. Fortunately for the city, residents voted three-to-one on April 5 to renew the levy.

“City revenues are still below pre-recession levels nationwide, and employee-related costs such as pensions, healthcare and wages, continue to be top pressures facing city budgets,” said NLC Research Director Christiana K. McFarland. “Cities are cautiously hiring in ways that allow them to meet service needs while maintaining fiscal stability.”

In Fort Lauderdale, Florida, City Manager Lee Feldman paints a somewhat different, and more positive, picture than the one in Kansas City. “This is the second year of increased hiring, but this year is more dramatic,” he said.

Fort Lauderdale has filled 77 positions in the last year, but city hall is still a couple hundred employees short of its pre-Recession employment peak. Feldman says his government has had to work smarter to meet an increased demand for city services with a diminished workforce.

The scenario Feldman describes appears to mirror the national data. Excluding education, local governments have increased their ranks for fifteen straight months.

When they do try to fill job vacancies, many cities face a more competitive labor market as private sector job growth has remained steady this quarter. “There is a lack of talent,” said Feldman. “Building inspectors and police officers are hard to find.”

Both Kansas City and Fort Lauderdale have had to revisit pay structures to keep pace with the market, especially for engineering and IT positions. But limits on revenue raising and fears of another downturn trigger concern.

“We are providing more services at a higher level,” said Schulte. “You begin to wonder about the sustainability of that.”

About the Author: Trevor Langan is the Research Associate for City Solutions and Applied Research at the National League of Cities.