Monday, June 08, 2009

To paraphrase the old country song - If it weren't for Government jobs we'd have no jobs at all....

As I've said before, NNY is somewhat insulated from the rapid swings in the economy due to our large proportion of public employees - soldiers, civilians at Fort Drum, education, prison employees, etc.

This typically means that we lag the rest of the economy during boom and bust times. I think that the NNY economy continued to grow (relative to many areas that were contracting faster) through much of 2008 and 2009 because of the belief that our regional economy is somewhat more stable.

Consider this article from AP

An AP analysis of economic data from around the country shows that economic pain in a county decreases as the percentage of government workers in its work force rises. Facts and figures about some of the counties around the country enjoying relative prosperity because of heavy concentrations of government jobs:

Leon County, Fla. — Home to the state capital, Tallahassee. Population 264,000. Percentage of government workers 20. 6.2 percent March unemployment and an AP Stress Index Score of 7.26 (4th lowest in Florida).

Champaign County, Illinois — Location of the University of Illinois. Population 193,600. Percentage of government workers 18.5. 7.1 percent unemployment in March and an AP Stress Index Score of 7.87 (ninth lowest in Illinois).

Johnson County, Iowa — Location of the University of Iowa. Population 128,000. Percentage of government workers 25.6. 3.6 percent March unemployment and an AP Stress Index Score of 3.89 (lowest in Iowa).

Riley County, Kansas — Home to U.S. Army's Fort Riley and Kansas State University. Population: 71,000. Percentage of government workers 17.4. 3.4 percent March unemployment and an AP Stress Index Score of 3.71 (12th lowest in Kansas).

Washtenaw County, Mich. — Home to the University of Michigan. Population 347,000. Percentage of government workers 19.1. 7.4 percent March unemployment and an AP Stress Index Score of 9.25 (second lowest in Michigan).

Albany County, N.Y. — Has both the state capital in Albany and a State University of New York campus. Population 298,000. Percentage of government workers 22.6. 7 percent March unemployment and an AP Stress Index Score of 8.4 (seventh lowest in New York).

Orange County, N.C. — University of North Carolina located here. Population 126,000. Percentage of government workers 26.2. 6.5 percent March unemployment and an AP Stress Index Score of 7.13 (lowest in North Carolina).

Dane County, Wisc. — Both University of Wisconsin and the state capital, Madison, are here. Population 482,000. Percentage of government workers 16.3. 5.5 percent unemployment in March and an AP Stress Index Score of 6.34 (lowest in Wisconsin).

So, the takeaway from data like this is that our local economy should be relative stable right now. However, there are important changes going on at the state level and I expect Federal and State employment to shrink over the next 5-10 years (at least I hope it shrinks). If this happens we could see a scenario where the private sector of the economy rebounds, but our local economy lags behind as state and federal spending is cut.

It should be interesting to watch.

3 comments:

Anonymous said...

I often wonder what the effect would be on a national level if we brought the approximate 1/2 million troops and many more civilians from 150 countries back to the us and housed them here. For instance, what is the economic impact to Germany given we have nearly 50,000 troops there? Or the 50,000 in Okinawa? Since our economy is heavily militarized (to the tune of about I trillion in DOD spending annually)wouldn't it be better spent here than over there? Especially since we're bankrupt anyway?

The Artful Blogger said...

Anonymous: That's an interesting thought. There is no doubt that large military installations provide substantial economic stimulus to certain regions. I suppose there are non-economic reasons for maintaining troops stationed around the globe, but those are big picture decisions that are beyond the scope of my understanding :)

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