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Why State and Local Government Workers Are Essential to Our Communities (And the Economy)
Widespread attacks on public servants present a major risk to our communities, our workers, and the economy.
By: Hank Kim, Executive Director & Counsel, NCPERSState and local governments employ approximately 20.6 million workers who keep our communities safe, educate our children, and deliver essential services each day. Yet, with an estimated 222,000 federal job cuts announced so far this year—and similar efforts brewing at the state level—the value of public servants' work has loudly been called into question.
Trust in major governmental institutions has been eroding for decades, and just 22% of Americans hold favorable views of the federal government. While the sentiment towards state and local government remains higher—at 50% and 61% favorability, respectively—the widespread attacks on public servants present a major risk to our communities, our workers, and the economy.
Economic Impact of State and Local Public Servants, Pensions
From school bus drivers to fire chiefs, state and local public servants make up approximately 13% of the workforce. While transparency and efficiency are important for any organization, a “slash and burn” approach may ultimately drive up costs for taxpayers while reducing the benefits they enjoy.
We've seen the harmful effects of shrinking the state and local government workforce before. When firefighters' jobs were cut during the Great Recession, departments were forced to resort to “rolling brownouts” that led to delayed services and increased risks to property and citizen lives. Similarly, when 350,000 jobs were cut from the K-12 public education system between 2008 and 2012, we saw lower school completion rates, larger class sizes, and increases in student achievement gaps.
Further, this approach may not account for long-term costs for taxpayers. Largely due to the mission-driven work and incentivized tenure provided by pensions, the public sector has significantly lower turnover rates than the private sector. The estimated costs for employee turnover can be up to 200 percent of the individual's salary, meaning any new hires down the road would come with hidden expenses.
Additionally, widespread layoffs in the public sector may have unintended consequences for the health of public pensions and the economy. With fewer active employees contributing to plans, taxpayers may be on the hook for increased contributions needed to fulfil pension obligations. If benefits are tiered down further, this would also harm the economy in the long run.
Currently, public sector pensions distribute nearly $400 billion in annual benefits. When taking into account the impact of pension retiree spending and investment of pension assets, an analysis of 2023 data by NCPERS found that every dollar taxpayers contribute to state and local pensions supports an additional $13.40 in total economic output.
State-Led Efforts Against Public Sector Workers
Already, we're seeing a ‘trickle down' effect from the efforts to reduce the size and scope of the Federal government. There has been an influx of anti-union activity and at least 11 states have created DOGE-inspired committees.
In February, Utah Gov. Spencer Cox signed into law a bill that will ban public sector unions from collective bargaining—impacting thousands of teachers, police officers, and first responders. According to the Economic Policy Institute, public sector collective bargaining rights narrow the pay gap between public and private sector workers by 8 percentage points. Efforts are currently underway to gather 200,000 signatures to qualify for a referendum, which would give voters the opportunity to overturn the law.
These attacks are not new, unfortunately, and tend to be cyclical. Following the Great Financial Crisis, we saw largescale efforts to undermine public sector unions when fifteen states passed laws restricting collective bargaining rights in 2011-2012. The recent efforts, though, do represent a reversal of positive momentum in the labor movement including Michigan's repeal of the right-to-work law in 2023.
NCPERS will continue to keep its members up to date on these developments. Pension fund staff responsible for advocacy efforts are encouraged to join the Government Affairs Roundtable to connect with peers and share resources.
Recognizing Public Servants and Attracting New Talent: Public Service Recognition Week
Now is the time to shift the narrative around the vital importance of public service. We invite you to share your stories with us (communications@ncpers.org) leading up to and during Public Service Recognition Week, held May 4-10, 2025.
- Tell us what you love about working for a public pension.
- Share stories of impact from your plan participants and retirees.
- Post on social media using hashtags #PSRW and #publicpensions, and be sure to tag NCPERS on LinkedIn or Facebook so we can help amplify.
- Send your job postings to membership@ncpers.org to help attract new talent to the public pension industry. View our latest careers roundup.
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