Every recession is caused by a different set of economic forces, and therefore every recession hurts a different set of workers. The collapse of the dot-com bubble at the beginning of the last decade resulted in many job cuts in computer occupations, whereas construction jobs mostly escaped mass layoffs. Conversely, when the housing bubble burst four years ago, construction jobs suffered much more than high-tech jobs. This is why identifying occupations with a lot of job security is a hazardous pursuit.
I was reminded of this hazard by two Yale economists who blogged today on The New York Times website. They start by asking, “Why is the recovery from this recession different from recoveries from past recessions?” The culprit, they find, is layoffs and reduced hiring by local governments: “Going back as long as the data have been collected (1955), with the one exception of the 1981 recession, local government employment continued to grow almost every month regardless of what the economy threw at it. But since the latest recession began, local government employment has fallen by 3 percent, and is still falling. In the equivalent period following the 1990 and 2001 recessions, local government employment grew 7.7 and 5.2 percent. Even following the 1981 recession, by this stage local government employment was up by 1.4 percent.” They note that state governments have also cut back on their workforces, but the effect is smaller because state government workforces were less than half the size of local government workforces to begin with.
The Yale economists estimate that if state and local governments were hiring as they did in the previous two recoveries, “they would have added 1.4 million to 1.9 million jobs and overall unemployment would be 7.0 to 7.3 percent instead of 8.2 percent.” The Yale economists use the term “hidden austerity program” to describe these job cuts by state and local governments, comparing them to the policies that European nations are pursuing—policies that are delaying Europe’s recovery and possibly propelling it toward a double-dip recession.
In the light of these comments, it’s interesting to note that last week the presidential candidate Mitt Romney said, “[President Obama] says we need more firemen, more policemen, more teachers. Did he not get the message in Wisconsin? American people did. It’s time for us to cut back on government and help the American people.” It’s difficult for me to understand how job cuts help the American people or why Europe is the model we should follow.
Politicians get to make policy (if they get elected); we who write about future job security in various careers have to deal with the consequences of those policies. In fairness to politicians, I should add that the cutbacks in state and local government jobs may not be entirely the work of Tea Party pressure on policy makers. The Yale economists speculate that the magnitude of the latest recession may have overwhelmed the ability of governments to save jobs as they have in the past through “creative accounting and shifting in capital expenditures.” Of course, the magnitude of this recession was also difficult to foresee.
When I wrote 150 Best Jobs for a Secure Future, I identified seven sectors of the economy that have a history of job security, and one of those was government. At the time, as the Yale economists point out, this seemed like a safe bet based on decades of economic history. Hindsight tells a different story.
Fortunately, most of the occupations with large public-sector workforces also find lots of employment in the private sector, so they remain promising career goals. For example, Registered Nurses, Financial Examiners, Computer Network Architects, and Management Analysts were among the top government-sector occupations that I recommended. They also have rosy outlooks in the private sector.