Government Largest State Employment Sector

BY MIKE NOYES

BOZEMAN—Government is now the largest employment sector in the state, surpassing the Trade, Transportation, and Utilities category in final January numbers, according to statistics on hours and earnings from the U.S. Department of Labor, Bureau of Labor Statistics.

"It's a frightening trend," said state Senator Joe Balyeat, R-Bozeman, chair of the Senate Business, Labor and Economic Affairs Committee. "Montana's private sector has been overburdened with government for a long time."
Government has long been the largest single employer in the state but not always the largest sector of the state's economy.

According to the recently released state Comprehensive Annual Financial Report the State of Montana was the top employer with about 21,500 employees and 5.26 percent of the state's total employment in 2009. Second on the list is the federal government with about 12,500 employees for just more than 3 percent. The state and federal governments also ranked first and second in 2000.

However, at the close of last year Trade, Transportation, and Utilities was a larger sector of the state economy, employing around 88,400 people in December, slightly more than the 88,300 employed by government during the month, according to seasonally adjusted numbers from the Bureau of Labor Statistics. According to final January numbers, government employed 89,900 as opposed to 89,300 for Trade, Transportation, and Utilities. Preliminary numbers for February also show government as the largest sector. (Total government includes federal, state, county and local employment including K-12 education.)

Jon Bennion, government rela-tions director for the Montana Chamber of Commerce, said those numbers are not good news for the economic environment in the state.
"If government continues to grow at the expense of the private sector, we can continue to see our economy be less than what it should be," Bennion said. "Government is depen-dent on the private sector."

Josh Franzel is vice president of research for the Center for State and Local Government Excellence, an organization to help "state and local governments become knowledgeable and competitive employers."

Franzel said each state economy is different and that a number of factors could influence employment sector numbers. Franzel said the fact that government is the largest employment sector is not necessarily a positive or negative.
"Because the U.S. is coming out of the worst recession since the Great Depression, many citizens need the services provided by state and local governments now more than ever," Franzel said.

Bennion said economic conditions may come into play in future budgets. He said the last three legislative sessions started with a significant budget surplus but the current economic conditions aren't as bright.

"State agencies will have to not only figure out how to justify even small increases, but perhaps come up with areas they need to cut" beyond the recent cuts Governor Schweitzer requested they outline, Bennion said. "We know ultimately it's going to be the private sector that's going to bear the weight of those increases."

Balyeat said he agrees that cuts should be made. However, he said that may depend on the outcome of the November elections and the makeup of the next legisla-ture.  "Our parents handed us the greatest economy in history," he said. "We're handing our children the greatest debt and burden ever imagined...at some point you've got to lay down your shovel and pick up a ladder."

Trade, Transportation, and Utilities, along with Government, are by far the largest employment sectors in the state. While Government was second in employment to Trade, Transportation, and Utilities for all of 2007 and 2008, the two sectors swapped places during certain months in 2009. Education and Health Services is the next largest employment sector, with around 61,300 employees in January, according to Bureau of Labor statistics. Total employment in the state for January was 425,400.

The Montana Policy Institute

 

 

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