Greece’s 15,000 Public Sector Layoffs Would Be 450,000 in the U.S.

[marmar]

from 24/7WallStreet:



The Greek ruling coalition has said it will cut 15,000 government workers as an austerity sacrifice to the European Commission, European Central Bank and International Monetary Fund. The “troika,” with Germany in the background, believe that Greece has still not made enough budget cuts to lower a deficit that continues to grow — to some extent because of a shrinking GDP. The 15,000 may seem like a very modest number, but it is equivalent to about 450,000 public sector layoffs in the U.S., based on the size of the working population in both countries. That is about 150 million in America and 5 million in Greece.

A cut of 450,000 public sector jobs in the U.S. might not devastate the economy, but it certainly would wound it deeply. Over the past six months, the number of jobs added on average per month has been about 120,000. The loss of 450,000 jobs could take several months to overcome. In the meantime, the government would carry the cost to support those who have become unemployed, and the growth of consumer spending, so critical to GDP, would face another setback.

The 15,000 jobs cut are another reason to question the power of austerity to fix national deficits and, eventually, bring down national debt. Greek unemployment is already 13%. Another 15,000 jobless people would increase that by half a percentage point. And more cuts in the private labor force of Greece are likely, as are cuts in the pay of those who will keep their jobs for now. The insult to a Greek recovery is well beyond the 15,000. ...............(more)

The complete piece is at: http://247wallst.com/2012/02/07/greeces-15000-public-sector-layoffs-would-be-450000-in-the-u-s/#ixzz1lhhryZOe