California’s public sector staffing crisis

  • Sara-Hinkley
Sara Hinkley

The Labor Center’s recent report Civil Service Vacancies in California 2022-2023 highlights the local effects of California’s statewide government staffing crisis. We found vacancy rates in several counties as high as 30% across wage levels and occupations.  Similar vacancy rates have been reported in cities, school districts, and state agencies. As a result, Californians have had to wait longer for basic public transactions, struggled to access critical services, and footed the bill for overtime and outside contractors to perform work normally performed by public employees. Public workers face higher workloads, mandatory overtime, and the stress of trying to provide services in a chronically understaffed environment. Workers testified to state legislators in 2023 about how understaffing, the high cost of living, and slow hiring efforts undermine morale, further damaging efforts to attract and retain vital public workers.

Governor Newsom has included the elimination of vacant positions as part of a proposed $8.5 billion in spending reductions in the 2024-25 budget cycle. Many local governments have announced hiring freezes and are targeting vacant positions for reductions. These cuts come as federal pandemic recovery funds are expiring and revenue recovery is stalling in many places, student loan payments resume, and renter protections expire.

The state can’t afford to ignore the pressing challenges of staff shortages in its efforts to resolve the budget deficit. The health of the state’s economy requires adequate public sector staffing, especially during economic downturns and recoveries.

How did we get here?

Without comprehensive data, untangling the many causes of high vacancy rates is difficult. Unfortunately, most government agencies lack systematic data on how long it takes them to post and fill positions, which occupations are hardest to fill, how applicant pools have changed, and other important metrics.

The tight labor market of the past three years has produced smaller applicant pools, driven up private sector wages, and increased turnover as workers enjoy more opportunities. Since 2010, private sector wage growth each month—while still well below inflation levels—has significantly outpaced that in the public sector, in contrast to the 2008 Great Recession when public sector wages remained relatively stable. A record low ratio of job seekers to openings leaves employers to compete for a smaller pool of workers. California’s population has declined since 2020 for the first time in the state’s history, and the working-age population is projected to decline steadily over the coming decade.

But the tight labor market and wage competition are not the only drivers of staffing challenges. Many occupations had a dwindling pipeline of new entrants long before the pandemic. Nurse, police, and teacher shortages have long predated the pandemic and have exploded since then. Social workers and mental and public health staff were already in short supply before the expansion of mental health programs in schools and counties exacerbated the gap in need.

Staffing shortages are also the product of decades of austerity. Beginning with the adoption of Proposition 13 in 1978, California has a long history of underfunding public services and of cutting services during downturns without later restoring them. The long stretch of employment decline after the Great Recession, frozen government salaries and hiring freezes, followed by massive job losses in early 2020, drove many government employees to the private sector or early retirement. This steady chipping away of public budgets (including wage and hiring freezes during the pandemic) has deteriorated the job quality for workers who remain. As of November 2023 there are 35,800 fewer people working in local government than in February 2020. By comparison private sector employment in California has recovered well, growing by 3.5% over the same period.

What can government do?

Systemize and publish data on vacancies: Data on compensation, hiring processes, qualifications, and other metrics for specific occupations or agencies with high vacancy rates should be collected and made public. This could take the form of task forces that involve labor partners and other stakeholders. In San Francisco a grand jury investigated the problem and made recommendations. Local governments have created labor-management committees to study compensation and career pathways for specific occupations. The public should also be informed  about the impact vacancy rates have on service quality, including longer emergency response times, delays in license and permit processing, wait lists for vital services, and other impacts.

Shrink the public-private sector pay gap:  When employers struggle to attract workers, they can try raising compensation—as many private sector employers have done for the past two years. Compensation studies can help employers better understand the wage structure of the industries and occupations that  they  compete with. However, public sector employers cannot pass higher costs onto customers or reduce shareholder profits like private companies do. Shifting resources from high-cost outsourcing and excessive overtime, and focusing on improving job quality by restoring reasonable workloads and sustaining high quality benefits, will also be important to addressing this imbalance.

Target recruitment and build pathways into public sector jobs: Armed with vacancy and applicant data, public agencies can develop targeted recruitment strategies and build career pathways for new workers and those facing barriers to employment. High road training partnerships can identify and train workers to enter public sector pathways, such as the model by Los Angeles County to prepare thousands of workers to fill community health positions. Involving workers and their unions in vacancy committees and documenting search processes could help identify opportunities for changing job requirements or enhancing training opportunities to attract workers.

Fix hiring processes: Long hiring processes, cumbersome civil service application requirements, understaffed human resource departments, and outdated state regulations can lead to hiring timelines of six months or longer from posting to start date, deterring all but the most persistent applicants. Local governments typically set their own processes and civil service requirements, but state regulations can limit hiring flexibility for agencies supported by state and federal funds. For example, a state bill proposed last session highlights the challenges that county human services agencies face in addressing vacancies because of regulations set by California’s Department of Human Resources.

Conclusion

In the absence of a strategy for addressing vacancies, governments often turn to short-sighted remedies that can further jeopardize service quality and exacerbate worker stress. This includes relying on contractors to cover staffing shortages, despite significantly higher costs, loss of quality control, and privacy concerns. For example, many school districts contract with providers outside California for legally-mandated special education assessments and psychological services at rates much higher than those of staff.

Agencies have also touted the potential for artificial intelligence (AI) technologies to address staffing shortages. The Governor’s recent Executive Order on AI directs state agencies to identify and pilot the use of AI in government processes, but research and experience has shown that without adequate worker involvement and oversight they pose significant risks.

Until the state can make much-needed improvements to its property and commercial tax structure, officials will continue to propose drastic service cuts. Eliminating or freezing vacant positions in state and local budget processes may be a convenient way to cut expenses, but without substantive staffing analysis the impact of leaving those positions empty could pose a severe burden on existing staff, Californians, and the economy.