In the April 2009 non-farm employment report released by the state Department of Workforce Services, Arkansas’ government employment – which includes federal, state and local jobs – rose to an estimated 222,100 workers.  That’s up 4,700 from one year ago.

Manufacturing lost 17,400 jobs in the past year leaving the industry with an estimated 166,700 workers at the end of April.

That means there are 55,400 more government jobs than manufacturing jobs in the state of Arkansas. 

Kathy Deck, economist and director of the Center for Business and Economic Research at the University of Arkansas, said that the government sector surpassed the manufacturing industry back in 2003.  She also noted that government employment has grown steadily since 1999, averaging about 1.7% annual growth. 

“In this recession year, government employment has grown at a pace that is slightly above that trend, but not significantly,” Deck said.

Arkansas now has 18.8% of employment in the government sector (compared to 17.4% in the U.S.) and 14.1% of employment in the manufacturing sector (compared with 9.1% nationally).

The April DWS report also shows that there are only 12,400 more jobs in the state’s largest industry classification – trade, transportation and utilities – than in government.  If current job trends continue, then by this time next year government will be the largest employer sector in Arkansas.

Total non-farm employment in the state - an estimated 1,182,800 Arkansans - is classified in 11 industry categories.  Four categories have showed job gains in the past year, while seven have declined.  Here is how they ranked at the end of April 2009; their year-over-year changes are in parentheses:

• Trade, Transportation & Utilities  234,500 (-12,900)
• Government  222,100  (+4,700)
• Manufacturing  166,700  (-17,400)
• Education & Health  163,500  (+6,100)
• Professional & Business Services  116,400  (-800)
• Leisure & Hospitality  104,300  (+2,500)
• Construction  52,600  (-3,100)
• Financial Activities  49,400  (-3,000)
• Other Services  44,900 (-900)
• Information  17,000  (-2,100)
• Mining & Logging  11,400  (+1,200)

Deck contends that the real issue isn't about the actual composition of the labor force, but whether or not growth in government employment crowds out private investment in manufacturing.

“The simple analysis above doesn't answer that question,” Deck said.  “There is no doubt that Arkansas, like the U.S., is becoming ever more service employment oriented and we cannot overlook that the government is a major service provider.”

Her analysis of employment data shows that government employment per capita in Arkansas in 2000 was 7.3 government employees (at all 3 levels) per 100 population.  In 2008, there were 7.7 government employees per 100 people. 

“So, there has been a little more than 5% growth in that ratio,” Deck said.  “Still, I don't think that is proof of crowding out when you consider the effects of globalization and technological change on manufacturing employment.”

Here is a link to the latest DWS jobs report.