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Wrong Direction: Needless Layoffs of Government Workers

David Callahan

Today's employment numbers offer a moment of relief from the drumbeat of bad news coming from Europe. The economy added 120,000 new jobs last month and the unemployment rate is now down to its lowest level since March 2009 (although partly that's because of discouraged workers dropping out of the labor force).

But here's the truly depressing thing about today's numbers: They would be even better if state and local governments weren't still firing so many public workers.

Some 20,000 government employees got fired last month, the single greatest area of labor force contraction. Even the ailing construction industry didn't lay off this many people.

So, as of last month, we have another 20,000 Americans who are not paying  taxes, who are collecting unemployment, and who may well make use of other forms of government assistance, such as food stamps and Medicaid. Oh, and these Americans won't be going to the mall much, depressing the consumer demand that everyone agrees we want to increase.

This is austerity at its worst. Not only could these layoffs easily be avoided through new federal aid to state government -- as Obama has proposed in his American Jobs Act -- but they don't save nearly as much money as imagined once you subtract the lost tax revenue and the new outlays for public assistance.

Worse, many of those laid off by government in the past two years work in public schools and state universities, which means that austerity is leading us to disinvest in the human capital which is so vital to America's future prosperity. Local school districts laid off six thousand people last month. How can that make sense?

There are no easy solutions to today's economic slump. But at least one strategy should be obvious: The politicians charged with addressing the jobs crisis should stop firing thousands of people every month who actually have jobs.