ECONOMIC TIME MACHINE

Local government holding back jobs recovery

 

dhanks@MiamiHerald.com

Miami-Dade has a new anchor to a recovery in hiring: local government.

With construction jobs back on the rise, local government now costs Miami-Dade more jobs than the building industry does, according to new revisions of federal labor statistics.

Since June 2010, when Miami-Dade ended a two-year decline in hiring, the construction industry has lost 2,900 jobs. But the local-government level, which includes teachers at public schools, has lost about 11,000 payroll slots.

The trend is somewhat deceiving, since the construction industry has shed far more jobs overall than has local government. Since it hit a peak in the fall of 2007, Miami-Dade’s construction industry has lost about 25,000 jobs — or about 45 percent of the people who used to work in one what was then one of the world’s hottest housing markets.

Since its peak in early 2008, local government is down 17,000 jobs, a 14 percent loss. About 101,000 people now work in local government, according to federal statistics, down from a peak of almost 120,000.

Washington’s $830 billion stimulus program kicked in during 2009, and sizeable chunk of the local aid subsidized wages for teachers, police and rescue workers. Mark Vitner, a Wells Fargo economist who tracks South Florida, said the federal stimulus program helps explain the current lag in government hiring, since it delayed cuts at the local-government level.

“A lot of cities and counties were facing serious shortfalls, but the federal stimulus money bridged that for a couple of years,’’ he said. “But it also made it tougher when the money ran out.”

On the gain side of Miami-Dade’s employment ledger, low-wage professions of hospitality and retail have been the main drivers of recovery — accounting for half of the jobs created since June 2010. Professional services finished third, though much of the growth was driven by low-paying temp workers.

The Miami Herald’s Economic Time Machine blog seeks to put South Florida’s recovery into historical perspective. We try to take the long view on economic stats. For analysis of the latest economic news, visit miamiherald.com/economic-time-machine and look for our weekly chart on Page 3 of Business Monday.

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