Public Sector Job Cuts Threaten Recovery

[OhioChick]

Since peaking in 2008, local governments have shed almost 500,000 jobs

Posted: July 8, 2011

This is what austerity feels like. In another setback for the economy, the unemployment rate in June rose to 9.2 percent, its highest level since December 2010, the Labor Department reported. A measly 18,000 jobs were added in June, carried by an increase of 57,000 jobs in the private sector but dulled by losses of 39,000 jobs in the public sector. As government stimulus winds down and states move to close massive budget gaps, public sector cuts should continue to grow, labor market experts say.

"These numbers are awful," says Tom Kochan, co-director of the Institute for Work and Employment Research at the MIT Sloan School of Management. "It means that we have fallen about 130,000 short of just keeping up with the growth in the labor force, and we are falling farther and father behind from restoring the jobs that we've lost from the Great Recession."

While the overall picture painted in the report is gloomy, the bigger story may lie in cuts on the government front. In June, local governments reported job losses of 18,000, and the federal government shed 14,000 jobs. Nearly 100,000 local government employees have lost their jobs so far this year, and 464,000 have found themselves jobless since local government employment peaked in September 2008. Meanwhile, private sector employers, who cut jobs at a more rapid pace earlier in the recovery, have slowly added jobs. Since March 2010, when private sector employment rose for the first time in more than two years, private employers have added about two million employees to their payrolls.

That means for total employment to grow, the private sector must pick up the slack. "We need more rapid growth in the private sector to compensate for the cuts in the public sector," says Patrick O'Keefe, director of economic research at accounting firm J.H. Cohn and former deputy assistant secretary at the U.S. Department of Labor. So far this year, private employers have added about 140,000 jobs a month—a pace that's too sluggish to have a meaningful effect on the unemployment rate. Economists say the economy needs to add 350,000 to 400,000 jobs each month over the next three years to bring unemployment down to around 6 percent.

More: http://money.usnews.com/money/careers/articles/2011/07/08/public-sector-job-cuts-threaten-recovery

[Taverner]

1. Yet on this very board, you will read about how those"rich" prison surgeons have it so good

[xchrom]

2. recommend

[locahungaria]

3. Thanks for posting.....

The scariest thing about this article is that these public sector jobs have traditionally been the "secure" jobs.

Folks used to choose public sector jobs over their private sector counter-parts for the job security and decent benefits, even though the salaries and over-all earnings potential was much lower. Nowadays, there are hundreds of applicants for a single public sector job opening because they are one of the few employers who still pay a "living wage".

Sad. ;(