Nonprofits a Bright Spot in National Jobs Picture

That's the conclusion of researchers at the Johns Hopkins University Center for Civil Society Studies, who found, based on data from twenty-one states representing every region of the country, that nonprofit employment grew by an average of 2.5 percent per year between the second quarter of 2007 and the second quarter of 2009, compared to an average decline of 3.3 percent for for-profit employment.

Hopkins researchers also found that:

• nonprofit job growth during the recession (2.5 percent) was stronger than it had been from 2001-07 (2.3 percent)
• for-profit job growth during the earlier period lagged nonprofit job growth, increasing on average just 0.2 percent annually, a pattern that prevailed in almost every state studied
• some fields fared worse than others; in the field of social assistance, for example, average annual job growth was only 1.4 percent in the 2007-09 period, and was actually negative in some states, including the District of Columbia (-4.5 percent), Maine (-1.5 percent), Indiana (-.9 percent), and Ohio (-0.8 percent)

(Click here for charts, table, and prelimnary analysis.)

"That nonprofit organizations have been able to increase employment in the face of the most severe recession since the Great Depression is a testament to the effectiveness of the federal stimulus program, which channeled assistance to many nonprofit organizations, and to the resilience and determination of nonprofit leaders and those who support them in the public and private sectors," said study author Lester M. Salamon. "But this accomplishment, impressive though it is, still leaves many needs unmet and many organizations and regions under severe strain."

The data do not directly support Salamon's assertion about the effectiveness of the federal stimulus program. And even if it eventually proves to be the case, I'm not sure it's cause for celebration. The flow of stimulus funds is slowing, and nonprofits that benefitted from those funds soon will be scrambling to replace them. More importantly, while American workers have been conditioned over the last thirty years to grab any job in a storm, what they really need on this Labor Day are good-paying jobs with good benefits. Nonprofit sector jobs rarely fit that description, and growth in the sector should not be viewed as a panacea for what ails the U.S. economy.

-- Mitch Nauffts