Pink Slips for Teachers Not So Good for the Economy

Laying off thousands of teachers and other public servants doesn’t sound like a particularly good prescription for a stronger economy, but that is the impact of state policy in Pennsylvania these days. So at the Keystone Research Center we decided to take a look at how Pennsylvania’s job performance stacks up against other states in the age of budget-cutting austerity.

Answer: Not so good. Pennsylvania’s strong economic growth coming out of the recession has slipped away in part because of state cuts, especially in education. Job growth has stalled, and now Pennsylvania lags behind many other states.

In last year’s budget, the state cut more than $1 billion for education, which contributed to a loss of 14,000 jobs in public schools and universities. Altogether the commonwealth shed 22,700 teachers, first responders, and other public servants between December 2010 and December 2011, according to the U.S. Bureau of Labor Statistics. Through May, another 5,400 public-sector jobs have been lost.

Not surprisingly, Pennsylvania’s economy-wide job performance (including the private sector) declined around the same time in comparison to other states. In 2010, Pennsylvania ranked 12th out of the 50 states in percent job growth but dropped to 36th in the past year (May 2011-May 2012) and 39th over the past six months.

Keep in mind, Pennsylvania has cut public schools and universities despite ending the past two years with budget surpluses. The state would have a stronger economy if more of those dollars were directed to maintain investments in education and health care.

As we noted in our policy brief, New Jersey offers a contrasting portrait. After making deep cuts in 2010, the Garden State had basement level job growth — 49th out of the 50 states. Yet in the past year, it has added, rather than subtracted, public-sector jobs, lifting New Jersey’s job growth percentage to 13th place between May 2011 and May 2012.

Maybe it’s time for Pennsylvania to follow Jersey’s new direction, shifting out of reverse so that we can move our economy and job growth ranking forward.

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