I had thought we might be over the hump by now when it comes to public sector layoffs, but perhaps that was overly optimistic. After all, California has just ordered furloughs in the latest episode of its budget standoff, and the budget there appears to be more than a month away. At the same time, CNNMoney reported today on a survey of local governments that suggests that cutbacks there will continue to add up.
Local governments are looking to eliminate 8.6% of their total full-time equivalent positions by 2012, according to a new survey released Tuesday by the National League of Cities, the National Association of Counties and United States Conference of Mayors.
The CNNMoney story holds out hope for federal help to keep local services going, but that isn’t exactly a realistic prospect, with Republicans angling to block all economic recovery spending as they hold out for a new tax cut for the billionaire-investor class. Realistically, Congress won’t be coming to the rescue, so the cutbacks that city and county governments are planning are virtually a done deal — and more cuts will surely follow. Many of the cuts can be accomplished through attrition, but significant layoffs are inevitable over the next two years.
Can businesses hire enough people to make up the difference? Probably, but with big business planning more layoffs and closings, that’s not a sure thing. The employment growth of the last few months hasn’t exactly been robust, and it could easily be reversed with the layoffs coming this fall.