The Swine Line

Today’s USA Today has an article by reporter Dennis Cauchon about how state bureaucracies are hiring up an ever increasing number of workers.  This is occurring because of the economic downturn:

Federal, state and local governments are hiring new workers at the fastest pace in six years, helping offset job losses in the private sector.

Governments added 76,800 jobs in the first three months of 2008, the Bureau of Labor Statistics reports.

That’s the biggest jump in first-quarter hiring since a boom in 2002 that followed the 9/11 terrorist attacks. By contrast, private companies collectively shed 286,000 workers in the first three months of 2008. That job loss has led many economists to declare the country is in a recession.

Job numbers for April, out Friday, will show if the trend is continuing. Some economists say a government hiring binge could soften a recession in the short term.

“Government jobs are an important cushion for the economy when the private sector falters,” says North Carolina State University economist Michael Walden.

All I can say is “Uh Oh.” 

When have you EVER heard of the converse occurring?  For example, can we expect those same state governments to shed those same workers once the economy upticks again in the future?  I think we all know the answer to that question. 

And that means that state taxpayers will be on the hook for those workers’ salaries, as well as their healthcare and pension liabilities far out into the future.  Where will the states look for additional revenue to help them pay for those obligations?  They will turn to higher state taxes and also to the big “Sugar Daddy,” the federal government to help them defray those costs.  And when you consider the dire fiscal conditions facing some states right now, this story represents 365 degrees of bad news.  

Here is a bit more from the article:

State and local governments have run deficits for the last nine months, the Commerce Department reports. Tax collections went flat in the middle of 2007, but spending has continued to rise.

The USA has nearly 88,000 units of government, mostly local, that employ 22 million. Hiring has been strong at every level, from new CIA spies to preschool teachers. Some of what’s happening:

•The federal government increased its workforce by 13,800 in the first three months of 2008. Local governments added 47,000 and states 16,000.

•The Rochester, N.Y., school system added 289 teachers while the school population shrank by 1,300 students. It’s part of a state-funded effort to reduce class size. New York City is adding 1,300 teachers. Florida and Texas are also hiring to reduce class size.

•The Texas city of Weatherford (pop. 25,000) added an assistant city manager, nine firefighters, three police officers and extra crews for roads and parks. “We have serious infrastructure issues that we need to get a handle on,” City Manager Jennifer Fadden says.

Some states may cut hiring to save money. Governors have announced hiring freezes in California, Delaware, Louisiana, Massachusetts, New Hampshire, New Jersey and New York, but the actions seldom trim total employment. Louisiana has hired 4,100 workers, mostly replacements, since a freeze began in January.

You can read some pretty alarming recent reports from the Government Accountability Office (GAO) about the state of the states and the extent of their unfunded liabilities here and here.