This week's report by the privately organized State Budget Crisis Task Force focused on fiscal conditions and indicators for a half-dozen states -- California, Illinois, New Jersey, New York, Texas and Virginia -- that account for more than one-third of the nation's population and 40 cents of every dollars spent by states and local governments.
Among other things, the report tracks changes in state and local government employment since the recession began. "Historically," it notes, "state and local governments have cut employment in recessions later than, and by much less than, the private sector." That pattern has pretty much held during this downturn. Five of the big states that were the focus of the task force study have reduced state and local government since the recession began, with most of the reductions occurring in just the past two years. The lone exception: Virginia.
Among other things, the report tracks changes in state and local government employment since the recession began. "Historically," it notes, "state and local governments have cut employment in recessions later than, and by much less than, the private sector." That pattern has pretty much held during this downturn. Five of the big states that were the focus of the task force study have reduced state and local government since the recession began, with most of the reductions occurring in just the past two years. The lone exception: Virginia.
How did Virginia alone managed to add state and local employees during the economic slowdown? The task force doesn't offer an answer, but consider this chart, based on data from the Bureau of Labor Statistics' Quarterly Census of Wages and Employment:
Only California -- whose fiscal problems were the most severe at the outset of the recession, and where furloughs imposed under former Governor Schwarzenegger effectively translated into a pay cut for state workers -- held wage growth for state employees slightly lower (at 6.5%) than Virginia (at 6.9%) in this period. Otherwise, wages for public-sector workers were much higher in all the other states studied. Given these data, it should come as no surprise that, after near-crippled California, the states with the biggest decreases in state and local government employment since 2007 have been Illinois and New Jersey, where averages wage increases were highest.
To be sure, these data don't equate directly to across-the-board base pay increases. In part, they reflect the impact of standard public-sector practice of laying off the most junior, lowest-paid employees and preserving the jobs of more senior workers with higher pay. But that's not the whole story. For example, more than half the average per-employee Illinois increase was contractual, agreed to by former Governor Rod Blagojevich in 2008 after the recession was began, while Virginia froze state workers' pay from 2007 through 2010. Likewise, the average pay hike for state workers in New York reflects a four-year contract reached in 2007, as well as the impact of a state law known as the Triborough amendment, which requires employers to continue paying wage increments even after contracts expire.
So, it would appear that one big reason Virginia didn't have to cut government payrolls as much is that it didn't increase public employee pay as much when the rest of the economy was tanking. Not coincidentally, Virginia is also one of the two right-to-work states studied by the task force -- the other being Texas, which has had by far the strongest economic performance of any of these states since 2009.
Only California -- whose fiscal problems were the most severe at the outset of the recession, and where furloughs imposed under former Governor Schwarzenegger effectively translated into a pay cut for state workers -- held wage growth for state employees slightly lower (at 6.5%) than Virginia (at 6.9%) in this period. Otherwise, wages for public-sector workers were much higher in all the other states studied. Given these data, it should come as no surprise that, after near-crippled California, the states with the biggest decreases in state and local government employment since 2007 have been Illinois and New Jersey, where averages wage increases were highest.To be sure, these data don't equate directly to across-the-board base pay increases. In part, they reflect the impact of standard public-sector practice of laying off the most junior, lowest-paid employees and preserving the jobs of more senior workers with higher pay. But that's not the whole story. For example, more than half the average per-employee Illinois increase was contractual, agreed to by former Governor Rod Blagojevich in 2008 after the recession was began, while Virginia froze state workers' pay from 2007 through 2010. Likewise, the average pay hike for state workers in New York reflects a four-year contract reached in 2007, as well as the impact of a state law known as the Triborough amendment, which requires employers to continue paying wage increments even after contracts expire.
So, it would appear that one big reason Virginia didn't have to cut government payrolls as much is that it didn't increase public employee pay as much when the rest of the economy was tanking. Not coincidentally, Virginia is also one of the two right-to-work states studied by the task force -- the other being Texas, which has had by far the strongest economic performance of any of these states since 2009.
E,J be careful of touting virginia, while politicians have guts, I find it a bit shameful that taxpayers are paying for virginia, as you noted that new york gets more money from federal tax cuts, virginia is a net recipient of federal money, every dollar sent is $1.50 back
by contrast new york and new jersey get less the 80 cents, nearly a third of virginia's economy is based on government spending, if government employees are not making the money , defense is, or related
services such as law firms, lobbyists, tax professionals, etc
Of course, virginia can receive credit, since maryland is in the same boat, but as ej pointed out in bush W's centric tax cuts, there is a federal v. state issue here. Liberals of course get what the ask and pay for sometimes, but taxpayers should not continue to dole out useless aircraft, $800 toilets, and inflation goods and services.