News / Events, Public Finance

HilltopSecurities’ Tom Kozlik Discusses the Future of State and Local Government Employment


Head of Municipal Strategy & Credit Tom Kozlik recently appeared on CNBC to share his outlook on state and local government employment and the impact on the public finance sector.


Video courtesy of CNBC

Last month, Kozlik emphasized in his May 21 commentary that the continued dip in state and local government employment is a potential threat to municipal credit and the U.S. economic recovery. He highlighted the following points about public sector jobs:

  • The state and local government labor market remains challenged, with the total number of jobs still 1.2 million below the pre-pandemic high. This is 300,000 fewer positions than observed during the post-Great Recession’s bottom.
  • When the Great Recession ended in 2009, state and local government jobs didn't bottom-out until four years later. They did not return to the pre-Great Recession peak until summer of 2019. Federal policymakers are hoping to avoid a similar lag that could have a negative impact on U.S. economic growth.
  • Federal fiscal policy guidance in the form of $350 billion of relief targeted to state, local, and tribal governments was finally released on May 11. In just the first 11 days, $105 billion of the $350 billion was distributed to state and local governments.
  • Results will likely be considered a policy win if state and local government jobs snap back quicker this time around. We expect this jobs recovery will not begin in a meaningful way until the fall of 2021.

For up-to-date coverage of the municipal markets, visit our municipal commentary page.


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