David Leonhardt’s column in today’s New York Times Business Section (given more prominent play on the Times home page) touts a slight recent increase in weekly earnings as evidence that the recession isn’t causing widespread pay cuts after all.

Wage growth has picked up in the last several months, according to two different government surveys. You don’t hear or read nearly as many stories about pay cuts these days. Even though unemployment has reached its highest level in 26 years, most workers have received a raise over the last year.

That contrast highlights what I think is one of the more overlooked features of the Great Recession. In the job market, at least, the recession’s pain has been unusually concentrated.

And it hasn’t been concentrated in the typical way. Nearly every region and every demographic group has indeed been affected. But the pain has been concentrated within groups.

[snip]

Try thinking of it this way: All of the unemployed people in the country are gathered in a huge gymnasium that’s been turned into a job search center. The fact that this recession is the worst in a generation means that there are many, many people in the gym. The fact that the economy is churning so slowly means that there is not much traffic into and out of the gym.

In other words, the “overlooked feature” of this recession is that the unemployed are a lot worse off than the employed.  Who woulda thunk it?

Although Leonhardt acknowledges that, like many newspaper employees, he is among those who have taken pay cuts in the past year, he thinks the general wage trend confirms the long-held view of economists that wages are “stickier” than jobs.  Employers, it’s theorized, don’t want to risk alienating or demoralizing their remaining workers with pay cuts, even in downturns.

Maybe.  But in his delight at finding what looks like a pony in the economic manure pile, Leonhardt overlooks the most striking disparity in the wage and employment data.  According to one of the two Bureau of Labor Statistics surveys cited in his column, the 1.5 percent increase in compensation costs for private sector workers during the 12 months ending in June was the smallest such change since the series was first published in 1980.  Meanwhile, compensation costs for state and local government workers have hardly budged–rising at a 3.2 percent rate as of June, compared to 3.5 percent in June 2008.

The difference is illustrated in this chart:

The increase in compensation costs for state and local government workers in the second quarter accelerated to 1 percent from 0.8 percent in the previous quarter, while the private sector increase was a measly 0.2 percent, same as in the previous quarter.

Some wages, it seems, are a lot “stickier” than others.  And so are some jobs: as the Rockefeller Institute recently reported, while the private sector has shed 7 million jobs since the recession began, state and local government has added 110,000 jobs.

Try thinking of it this way: The entire private sector economy is contained in this huge sports arena, with some people still working on one end of the floor while others line up with job applications at the other end.  And watching it all from the sky-boxes are the people in the public sector.