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Thursday, June 21, 2012

Public Workers Face New Rash Of Layoffs, Hurting Recovery

Companies have been slowly adding workers for more than two years. But pink slips are still going out in a crucial area: government.

In California, the governor is threatening to eliminate 15,000 state jobs. When school begins in Cleveland this fall, more than 500 teachers probably will be out of work. And in Trenton — which has already cut a third of its police force, hundreds of school district employees and at least 150 other public workers — the only way the city will forestall the loss of 60 more firefighters is if a federal grant comes through.

Government payrolls grew in the early part of the recovery, largely because of federal stimulus measures. But since its postrecession peak in April 2009 (not counting temporary Census hiring), the public sector has shrunk by 657,000 jobs. The losses appeared to be tapering off earlier this year, but have accelerated for the last three months, creating the single biggest drag on the recovery in many areas.

With the economy expanding, albeit slowly, state tax revenues have started to recover and are estimated to exceed prerecession levels next year. Yet governors and legislatures are keeping a tight rein on spending, whether to refill depleted rainy-day funds or because of political inclination.

At the same time, costs for health care, social services, pensions and education are still rising. Fourteen states plan to resolve their budget gaps by reducing aid to local governments, according to a report by the National Governors Association and the National Association of State Budget Officers.



Anonymous said...

boohoo. Goodbye municipal sponges!

Anonymous said...

Blah, blah, blah, the same old "teachers, firefighters, and police" drivel! Lay off the administrators sleeping behind their desks and reaping in $100k+ for doing nothing. The bleeding has to be stopped, and the unions keep singing this same old song. We tire of it...

Anonymous said...

It is way past due lets trim the fat right now.

Anonymous said...

Since its the $100,000 + a year people who will let all the workers go,who will do the work?It needs to be the other way around.

Anonymous said...

The money tree is about dead!