In September of 2010, the National Bureau of Economic Research (NBER) declared that “the Great Recession” had actually ended in mid-June of 2009 after an 18-month period of economic upheaval that began in December of 2007. Nearly two years later, both economic expert and layperson are still questioning whether the American public actually received a memo on the recession’s end as opposed to a pink slip telling them they were still unemployed.
While a definitive explanation of what a recession is and what separates it from a depression is more complex than the secret recipe for a hedge fund, it’s clear that for many Americans, especially those in the public sector, that the recession is still in effect.
According to “The Public-Sector Jobs Crisis”, a report from from the Economic Policy Institute, despite private sector gains of 3.2 million jobs since the official end of the recession, the public sector continues to lose jobs. In fact, in 2011, local and state governments endured the worst job-decline in history.
The report finds that from February 2010 when the “labor market bottomed out,” to January of 2012, the public sector in contrast to the private sector’s gain of over 3 million jobs, saw nearly 438,000 jobs lost.
Among the report’s key findings:
- Unlike other groups who either took jobs in the private sector or exited the labor force since the beginning of the recession, African Americans have faced greater difficulty in finding other work and/or remained more strongly attached to the labor market.
- The Great Recession caused the largest drop in state revenues ever recorded and left many states facing dramatic budget shortfalls. Because most state constitutions do not allow deficit spending, this has led to steep reductions in state and local budgets, which has translated into significant job loss among state and local public-sector employees.
- In the private sector, African Americans earn an average of 12.9 percent less than White workers. Yet among state and local public employees, the wage disparity between African Americans and Whites is only 2.2 percent.
- In the private sector, African Americans at every education level earn wages significantly lower than those of White workers. The smallest wage gap in the private sector is for African Americans with some college, who earn 11 percent less than similarly educated whites. The largest difference is for African Americans with advanced degrees, who earn an average of nearly 20 percent less than whites with advanced degrees.
- Women earn only 77 cents for every dollar paid to their male counterparts, and the situation is worse for African American and Hispanic women, who earn only 62 cents and 54 cents, respectively, for every dollar paid to their non-Hispanic white male counterparts.
Unfortunately, for a number of reasons directly and indirectly linked to historical and current discrimination argued the report, the public sector losses have had a disproportionately adverse impact on both women and African Americans.
Overall, the public sector lost nearly 765,000 jobs from 2007-2011 with women and African Americans making up 70% and 20% respectively of those cuts.
Report co-author Algernon Austin, Director of the EPI’s Race, Ethnicity, and Economy program believes the implications of the public sector’s non-recovery remains frightening for an already shattered middle class.
“The Black middle class is disproportionately dependent on the public sector (employment) and the public sector is under attack,” said Austin. “Some of us who talk about us (America) being post-racial say look at the growth of the Black middle class, but right now the B;ack middle class is in trouble.”
The report also documents the continual impact of discriminatory patterns in labor and hiring, as well as data documenting still-present wage-discrepancies between Whites and similarly educated African Americans or women.
“It’s just absurd to say that we are post-racial, even when you control for normal factors, public sector workers earn less…(there is) still a significant wage penalty for being female,” added Austin.
Post-racial or post-gender myths notwithstanding, the report makes clear that Americans are in tough economic times with not enough relief in sight requiring aggressive action.
Austin and his colleagues call for an “expanded federal recovery program—such as greater fiscal relief to states, funding for infrastructure and school modernization projects, continued support of social insurance programs, and direct job creation programs in hard-hit communities.”
However, he remains pragmatic about the political will to eliminate current more subtle institutionalized racism.
“Black communities are always moving between recession and depression…we’ve never had good employment.”
Others, including Noble Prize economist Paul Krugman, author of “End This Depression Now!” are also calling for the Federal Reserve, Congress and the President to do more to get people back working.
“Unfortunately we really need a national movement,” said Austin, harkening back to the 1963 March on Washington where full employment was still considered a key plank of racial equality.
“We think the civil rights movement is over (but it’s not)…it was fundamentally about jobs and we have not attained that ideal of low employment that Martin Luther King, Jr. and others were fighting for.”