Government job loss slows economic recovery, report finds

Cuts in government jobs have contributed to slow economic growth in some metropolitan areas, according to a report released by the Brookings Institution on Wednesday.

The Metropolitan Policy Program at Brookings examined economic data from the start of the recession in 2008 through the first quarter of 2011 for the nation's largest 100 urban areas, and found the locations that had made the weakest recoveries had typically lost government jobs. Cities where government work had increased were better able to rebound. Areas that depended on the education, oil and gas industries also fared well.

"Our metro areas are not recovering strongly or consistently," Howard Wial, a Brookings fellow who co-authored the report, said in a press release. "Job growth is sluggish. Unemployment remains high. Housing prices have hit new lows. On top of that, cuts in government employment have contributed to the slowdown."

Specifically, 19 of the 20 metropolitan areas that bounced back the best from the recession -- including Washington -- gained government jobs since total employment hit its peak. Thirteen of the 20 cities with the weakest recoveries lost government positions since their high point in total employment.

Brookings' study included state and local employment, however, which accounted for much of the change in government employment in many areas. Federal employment fell in 50 of the cities studied, while state employment fell in 43 and local employment fell in 60.

The think tank ranked the 100 areas by considering factors such as the amount of change in the unemployment rate, economic output and housing prices from March 2008 to March 2011. The strongest performing areas included Austin, Texas; Dallas; Washington; Raleigh, N.C.; and Denver -- all of which saw an increase in the number of government jobs. Some of the lowest performing areas were Phoenix; Las Vegas; Cleveland; Detroit; and Minneapolis, Minn.; all of which lost government jobs since peak total employment.

After hitting the lowest point, total employment grew by 0.8 percent in the 100 areas Brookings studied. At the same time, total government employment fell by 0.9 percent, with federal employment decreasing 0.4 percent.

The majority of metropolitan areas have recovered from their low point, Brookings found, but only 12 cities have regained more than half the jobs they lost. And only two Texas cities -- McAllen and El Paso -- which have increased local government jobs by 5.6 percent and 6.4 percent, respectively, made a total job recovery.

"The metropolitan data show that government is associated with economic performance during the recession and recovery," Brookings said in the report. "Although we do not have data on government spending at the metropolitan level, data on government employment make the point."

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