Coming government layoffs
Apparently the only jobs the massive "stimulus" may have saved, at least temporarily, were government jobs. Now, even those are in jeopardy as state and local governments are forced to deal with the reality of their fiscal situation:
Up to 400,000 workers could lose jobs in the next year as states, counties and cities grapple with lower revenue and less federal funding, says Mark Zandi, chief economist for Moody’s Economy.com.
Layoffs by state and local governments moderated in June, with 10,000 jobs trimmed. That was down from 85,000 job losses the first five months of the year and about 190,000 since June 2009. But the pain is likely to worsen.
States face a cumulative $140 billion budget gap in fiscal 2011, which began July 1 for most, says the Center on Budget and Policy Priorities.
While general-fund tax revenue is projected to rise 3.7% as the economy rebounds in the coming year, it still will be 8%, or $53 billion, below fiscal 2008 levels, according to the National Association of State Budget Officers.
And that means that states will not be able to afford some of the services or staff they presently employ. And that, of course, means layoffs and even more workers seeking jobs. While to this point, many state and localities have been able to avoid layoffs by offering furloughs, that option is no longer viable for most.
And economic growth isn’t looking all that hot either. Wells Fargo economist Mark Vitner is amending his third quarter economic growth estimate from 1.9% to 1.5%.
If this is a recovery, I’d hate to see a depression.