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When Is a Hiring Freeze Not a Hiring Freeze?

Leonard Gilroy
March 19, 2009, 5:05pm

Facing mammoth and mounting budget shortfalls, a number of governors implemented state hiring freezes last year as a check on the growth of payroll and benefits. But in the Bizarro Worlds of state government in California and New York, a hiring freeze apparently means quite the opposite.

In California:

Last July, California Governor Arnold Schwarzenegger (R) signed an executive order to cut state worker pay during the budget crisis. "I'm also ordering a hiring freeze," said Governor Schwarzenegger last year.

But a Sacramento Bee analysis of the last nine months shows the state hired roughly an additional 2,000 people outside public safety, even as the budget deficit ballooned and the California faced a huge cash crunch.

The state employed 204,525 full-time workers last June. By November that number jumped to 206,251. It dipped slightly in December, before jumping back up to 206,650 in January 2009. The number of employees went up in 66 agencies.

As an aside, this tidbit within the California story made me chuckle:

Surprisingly, the U.S. Census Bureau found California has one of the leanest state governments. "If you figure out the number of workers per 10,000 people, we rank 49th out of 50 states. For most of the last 10 years, we rank 50th. We do not have an over-bloated state work force," says Professor Tim Hodson, from the Center for California Studies. (emphasis mine) [...]

Oh wait, that's right...this is Bizarro World, so the opposite is actually the case. And we all know why:

It's also interesting to note the state's largest public employee union, SEIU, has a lot of influence at the Capitol. During the last two-year legislative session, lobbying records show it spent nearly $11 million -- the most of any interest group. (emphasis mine)

Not to be outdone, there's New York:

Gov. David A. Paterson, with much fanfare, last year ordered a “hard” hiring freeze to help contain costs for the deficit-plagued state budget. But since October, more than 8,000 people have been added to the state’s payroll.

The new state workers — from college professors and snowplow operators to state troopers and even a ski school instructor — are on top of the more than 31,000 people hired during a previous three-month hiring period examined last fall by The Buffalo News during the freeze period, which began last July 30. [...]

The Paterson administration defended the situation, saying that most of the new hiring was beyond its control. About 70 percent of the new employees work at agencies outside of Paterson’s direct command — such as the State University of New York, the Legislature and the court system—and thus do not have to abide by his hiring freeze edict. Paterson could only ask those agencies to abide by the freeze. [...]

At the very least, the numbers show the many loopholes, even legitimate ones, that make a hard hiring freeze in state government a challenge.

I'd say that's an understatement. Unfortunately, this is consistent with the national trend:

In the private sector, construction, manufacturing, and business services all lost more than 100,000 jobs in February, and the service-providing sector lost more than 375,000 jobs, according to the BLS.

Yet public sector jobs grew in February, as they had in previous months. The government added 9,000 jobs last month, and the education and health service fields added 26,000 positions.  

Back in January, the government sector added 31,000 jobs, while the education and health service fields grew by 43,000, according to the BLS.
 
These latest data follow a trend that has continued for more than a year. According to the BLS, the private sector lost an estimated 3.65 million jobs in 2008, but government jobs increased by nearly 150,000 in the same time period.
 
John Palatiello, president of the public affairs consulting firm John Palatiello & Associates, said that President Obama’s plans to continue to expand government while the private sector struggles is a strange way to go about strengthening the economy.   
 
“[This trend] creates a very interesting and unfortunate irony: You have rising unemployment in the private sector and you have rising employment in the government sector,” he said. “It seems to me that, if you really want to stimulate the economy, you should do the opposite.”
 
"You should be trying to get more and more things out of the government and into the private sector because that has a much more stimulative effect,” said Palatiello. "You should put the brakes on some forms of government spending and increase the number of people who are on payrolls, paying taxes and employed in private sector jobs."

At least we're not the only ones going through this.


Leonard Gilroy is Director of Government Reform


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