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Local Public Employee Layoffs Fuel Vicious Cycle of Economic Crisis

The attack on public workers at the state level has been big news: the words “Wisconsin” and “Ohio” have become shorthand for a national right-wing legislative strategy designed to beat up unions and their members.

But at the local level, things are even worse. Since 2008, municipal and county governments have shed a total of 535,000 jobs, losses that, according to USA Today, have negatively offset any job-generating progress made in the private sector.

When public employees lose their jobs, everybody suffers—and not just because of services lost, libraries closed or schools with crammed classes. Lost in the rhetoric of assault on public workers is the simple fact that they are workers, and the loss of every public-sector job adds to one more person to the unemployment rolls, deprives localities and states of much of the tax revenue they once paid, and adds the potential for yet another foreclosure or default on personal debt.

As economist Dean Baker of the Center for Economic and Policy Research explained to The Washington Post’s Ezra Klein earlier this month:

We’ve lost 500,000 state and local jobs, and before that, we were creating 160,000 a year. If we hadn’t had those losses and had done more to keep creation at that pace, we would have almost another million jobs.


That simple fact, though, has not stopped some unscrupulous politicians from taking advantage of the crisis as a way to weaken public employee unions. According to the USA Today story:

In New York, Nassau County Executive Edward Mangano is proposing to lay off 700 workers in 2012 after leaving 300 jobs unfilled this year to wipe out a $310 million budget gap.

What the article fails to mention is Magnano’s assault on existing union contracts, as we noted here—with a proposal that could have national ramifications. John Durso, president of the Long Island Federation of Labor, says in a video produced by the area’s Civil Service Employees Union:

This proposed law is even more devastating than what has happened in New Jersey or Wisconsin or in Ohio.

Other municipalities engaged in a job-cutting frenzy, according to USA Today, include Chicago, San Jose and Venice, Fla., which is slated to cut 9 percent of its workforce.

Vicious Cycle

The crisis in municipalities and county governments began, as we reported last week, with the bursting of the housing bubble. The resulting recession and the unemployment it generated meant not only a greater demand for state services, but less revenue for state governments, which in turn slashed support for local governments.

Then the decline in home values hit local governments directly. Property taxes, generally levied at the local level and used to fund education and local services, are based on the value of a home. When that home value plummets, that means less revenue to the locality.

In the midst of the crisis, right-wing operatives saw their chance to attack unions, and to attempt to pit private-sector workers against those who work for government. It worked for a while, but now Americans are beginning to take stock of the attack on the whole middle class. In Ohio, polling on a referendum that will either ratify or repeal the state’s recently passed bill that greatly curtailed collective bargaining for public employees if running in favor of rolling back the bill, which will appear on the Nov. 8 ballot.

And a majority of voters in New York State, where Gov. Andrew Cuomo has played hardball with public-sector unions, recently expressed sympathy, in a poll by Siena research, with the Occupy Wall Street movement’s message: “We are the 99 percent.” According to the New York Daily News:

The Siena respondents also said, by a 49% – 28% margin, that if they had to join one or the other, they’d pick the Occupy Wall Street movement over the Tea Party.

Yesterday, Cuomo and the New York State Public Employees Federation reached a tentative agreement that will avoid further layoffs if union members approve the deal.

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