South By North Strategies, Ltd.

Recent research from the Economic Policy Institute explores the extent to which austerity on the part of state and local governments has dragged down job growth.

How many more jobs would we have if the public sector hadn’t been shedding jobs for the last three years? The simplest answer is that the public sector has shed 627,000 jobs since June 2009.  However, this raw job-loss figure understates the drag of public-sector employment relative to how the economy functions normally.
…
Over this same period, the overall population grew by 6.9 million. In June 2009 there were 7.3 public-sector workers for every 100 people in the U.S.; to keep that ratio constant given population growth, the public sector should have added roughly 505,000 jobs in the last three years. This means that, relative to a much more economically relevant trend, the public sector is now down more than 1.1 million jobs. And even against this more-realistic trend, these public-sector losses are dominated by austerity at the state and local level….
…
It should be noted that this counter-factual of 1.1 million additional public sector jobs is a perfectly reasonable benchmark. Before the Great Recession, the number of public-sector workers per 100 people had averaged right around 7.3 since the late 1980s. In other words, having 1.1 million more public-sector workers, which would put us back at 7.3 public-sector workers per 100 people, would simply restore our economy to a normal level of government employment.