Public sector employment continues to slide
However positive signs in the May jobs report could sideline federal legislation to extend aid to local governments.
State and local government employment plummeted from April to May, according to the latest jobs report from the Bureau of Labor Statistics.
Overall, states and municipalities shed 571,000 jobs between April and May as a result of the economic fallout of the coronavirus pandemic.
Most of the job losses stemmed from teacher layoffs and other job losses in education, but about 200,000 public-sector job losses were outside of education.
The May job losses are on top of approximately 1 million public sector jobs shed in April.
"There is general consensus among leading economists that this public sector job loss will prematurely stall the broad-based recovery if it is not addressed, " Lee Saunders, president of the American Federation of State, County and Municipal Employees, said in a statement. "We need paramedics, school employees, sanitation workers and others on the job if we’re going to safely reopen the economy."
Non-postal federal employment dipped by 15,300 for May, after staying stable in April. This is likely a function of retirements and a slower pace of job replacements because of the impact of COVID-19 office closures on hiring.
Thought the public sector has been hemorrhaging jobs throughout the COVID-19 crisis, overall job numbers were positive for May, with the economy adding 2.5 million jobs. The unemployment rate dropped from 14.7% to 13.3%.
The economic uptick could doom plans for a second economic bailout in the form of the House-passed Health and Economic Recovery Omnibus Emergency Solutions Act, a $3 trillion bill that includes funds to support state and local government operations. Even before the jobs report, the Republican-led Senate had declined to act on the bill and the White House threatened a veto.
"There's no reason to have a major spending bill," White House economic adviser Stephen Moore told the Washington Post. "The sense of urgent crisis is very greatly dissipated by the report."
Saunders is still pushing for an aid package. He urged the Senate "to put partisanship aside and move quickly to pass aid to states, cities and towns -- so we can maintain the services that keep our communities strong and turbocharge the economic recovery we need."