Global Breaking News - Monday, December 23, 2024

Are Government Layoffs the Problem?
As the economy continues its slow, fitful recovery, the private sector has added hundreds of thousands of jobs. But state, local and federal agencies have responded to tightening budgets by laying off hundreds of thousands of workers. What effect have these layoffs had on the economy? Could governments have responded to the recession in any other way?
* fitful = 잠깐씩 하다가 마는/ respond to ~ = ~에 대응하다/ tighten = 조여지다(조이다); 더 엄격하게 하다

 해고(감원)가 경제에 어떤 영향을 미치나요? 정부는 불황에 다른 방법으로 대응할 수 있는가?

1. A Major Cause of Persistent Unemployment
Public payroll cuts that exceed historical averages account for 26 percent of the 8.5 million jobs needed to restore economic health.

2. Government Layoffs Don’t Hurt; They May Help
More state and local government employment results in more taxes, which drags down private sector employment.

3. Cuts Account for a Half-Point Drop in G.D.P.
G.D.P. would have risen by 2.3 percent, not 1.8 percent, if not for government layoffs -- a big difference in putting people back to work.

4. More Stimulus and Fewer Tax Cuts Are Needed
Federal and local policymakers could have prevented many of these layoffs.

5. Public Cuts Lead to More Private Employment
Private sector employment is important for the simple fact that state and local tax revenues fund public sector salaries.


Sample Essay

Government Layoffs Don’t Hurt; They May Help

Some have suggested that cuts in state and local government jobs have negative effects on the economy. But that’s contradicted by the latest data on public and private sector employment and gross domestic product, by state.

The reason is clear. In general, higher state and local government employment results in a greater tax burden to finance public sector salaries and health and pension benefits. These higher taxes result in a decline in private sector employment and state G.D.P.

Between 2010 and 2011, 34 states, almost 70 percent, including California and New York, showed a decline in state and local employment but growth in state G.D.P. In six states, including New Jersey, state G.D.P. declined after cuts in government employment. State G.D.P. increased after government employment increased in nine states, and in one state, Wyoming, state and local government employment increased while state G.D.P. declined.

Private employment is a much stronger indicator of a state's economic growth. Between 2010 and 2011, private employment and state G.D.P. both rose in 42 states, 84 percent of the country. In one state, Arkansas, state G.D.P. increased while private employment decreased. And in seven states (including New Jersey), state G.D.P. declined while private employment increased.

There are other variables affecting a state's economic climate, and government layoffs are not the major one. But those layoffs do not drag down a state's economic activity.

Results vary by year, but, particularly in an expanding economy, it's quite likely that a state that cuts its budget by shrinking its public sector will see economic gains.