Labor & Employment Law

Jobs Now: States and Cities Need Our Help

By Seth Michaels

During an economic crisis like the one we’re in now, the squeeze on state and local budgets is brutal. Even as the revenues that are coming in from citizens and businesses decline, residents’ demands for services and assistance increase.

The resulting strain can result in even greater unemployment as teachers, firefighters, police officers and other essential public workers get laid off. To balance their budgets, states often turn to tax hikes or service cuts?at a time when working people can least afford them. 

The AFL-CIO’s five-point plan for job creation includes a call for aid to state and local governments because the situation in our states, cities, counties and towns is dire. This year alone, state and local governments are looking at a $178 billion budget shortfall.

An analysis by the Economic Policy Institute (EPI) shows the state budget crisis could blunt economic recovery, now and in years to come. The EPI report says: 

Widening state and local budget shortfalls present a ticking time bomb for the economy. If they are not addressed, state and local governments will be forced to accelerate layoffs, reduce pay, reduce services and raise taxes and fees. These moves create a drag on the economy, weaken the recovery and result in the loss of millions of public and private-sector jobs. 

EPI’s analysis shows the damage from state and local budget cutbacks affects public employees and private-sector businesses, as well as residents who make use of schools, health services, transportation systems and public safety agencies. 

Aid to help states meet their budget needs?especially in education and Medicaid?was one of the most effective parts of the American Recovery and Reinvestment Act earlier this year. We need to renew and expand that vital assistance, so state and local governments can invest in their communities and meet the needs of their residents struggling with the economic crisis. 

Otherwise, working families could find their difficult times compounded by higher state and local taxes, hundreds of thousands of more lost jobs and damage to the schools, transit systems, police and fire departments and health care facilities they need.

Full post as published by AFL-CIO NOW BLOG on December 09, 2009 (boomark / email).