Insights & Advice


Public-Sector Jobs Can’t Compete in Tight Labor Market | What To Do?

many Americans are choosing private-sector jobs over roles in the public sector

State and local government employees are essential in delivering everyday services to the American public, but the government’s labor force is understaffed and has yet to recover from its pandemic lows. The reasons range from lower pay and less advancement, to little flexibility in areas such as remote working.

Private-sector jobs have already surpassed pre-pandemic levels, while in the public sector, government employers are still looking for more than 664,000 workers with little success. This may sound like one of those “so what” kinds of issues but consider this.

Public employees operate the nation’s trains, subways, and buses in addition to delivering essential services like health and unemployment insurance. Also on the list: safety-net services such as housing and cash assistance, protecting the nation’s water, food, and air, as well as combating infectious diseases. And let’s not forget the increasingly difficult duty of teaching and caring for our kids in state universities, community colleges, and K-12 education.

I focus on teachers especially since jobs in education account for most of state and local employment, according to the U.S. Census Bureau. Teaching salaries have the reputation of being notoriously low in the best of times, which these are not.

The ongoing pandemic, now in its third year, provides a clear and present infection danger for all teachers. Throw in the increasing number of school shootings, and the tension that goes along with it daily, and you can understand why teachers have been retiring in droves with few replacements.

The increasing political pressure from outside the classroom on everything from facemasks, to books, to what lesson plans will be least likely to cause turmoil and/or outrage among parents adds to the teacher’s list of grievances. No wonder that, with a laundry list like that, it becomes even more difficult to woo young teachers for $42,000 a year (according to the NEA, the average starting salary for U.S. teachers was $41,700 for the 2020-21 school year) when the same graduate can earn twice that and more in the tech industry.

Workers considering employment in areas like education, the postal service, etc. are being wooed away in this tight labor market by hefty signing bonuses and faster wage growth in the private sector, which becomes especially important in an inflationary environment.

You would think the simplest solution would be to raise wages for government employees just like the private sector has been doing. That turns out to be a rather difficult proposition. In the past, state and local governments struggled with a combination of cutbacks in federal spending (depending on who was in office), as well as low tax receipts from time to time. This made budgeting difficult and somewhat unpredictable.

Which brings us to government budgets. For the most part, it is the budget which determines salaries for public workers. Budgets, as we know, are ponderous things that take a long time to pass, and almost always involve political horse-trading. Raising wages for government workers, therefore, is a hot potato that few politicians are willing to tackle unless they must.

Another disadvantage in finding workers is that government work is not as flexible. Working from home doesn’t cut it for a bus driver, police office, or letter carrier. Therefore, hybrid and remote work options just aren’t in the lexicon of most state and local governments. So, who suffers the most from these lower-wage jobs?

In the overall economy, state and local governments account for about 12% of employed people. Most of these workers, roughly 59%, are women. Workers of color, particularly Black and American Indian employees, are also heavily represented in these industries. As such, women and people of color, who have historically found economic security in municipal roles, have the most to lose amid stagnating public-sector wages.

Is there a solution to this employment problem? Probably, but not in the short term. However, as the wait times between your bus or subway stops lengthen, the lines at your unemployment office or at the tax assessor’s office trail out to the sidewalk, and your mail is two weeks late, we will notice and complain. At some point, if we yell loud enough, things will change, but I suspect not before they get much worse.

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