Economists expect public sector employment to keep shrinking as Gov. Jerry Brown tries to close a budget deficit projected to be $28 billion over the next 18 months. Many of these job losses will be felt in local government payrolls, which account for the lion's share of government employment.
"We're going to see loss in government jobs for the foreseeable future," said David M. Smith, associate professor of economics at the Graziadio School of Business at Pepperdine University. "Frankly, they need to be on the decline for us to get our budget situation under control."
California managed to add a total of 87,500 jobs in 2010, mostly in professional and business services, education and health, and leisure and hospitality. While that's well below the pace needed to bring down the unemployment rate, it's a big improvement over 2009 when the state lost 836,000 jobs.
But the government sector has had to contract to compensate for lower revenue collections. The sector lost 21,700 jobs in 2010, with most of those positions coming from local government.
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