MAIN MEME: Walker, GOP force big-time job cuts, then complain about sluggish growth | Wis.Community

MAIN MEME: Walker, GOP force big-time job cuts, then complain about sluggish growth

[img_assist|nid=129748|title=|desc=|link=none|align=right|width=276|height=166]Here in Wisconsin and nationally, Republicans have spent the past three years attacking President Obama and Democrats for not returning the country to the high-flying times that preceded the Big Crash of 2007-'08.

Scott Walker, in particular, simultaneously claims he's creating lots of jobs while criticizing the federal government and national economy when people inconveniently point out that Wisconsin badly lags the nation in job growth. As in, there's hardly been any job growth here since Walker crafted his draconian budget removing billions of dollars in aid, salaries and program funds for state, county and local governments. The cuts included drastic reductions in public employee compensation, which in turn has led to massive early retirements statewide, and lay-offs in some local units of government.

And what has all this wrought in just a few months? A national economy that actually has been doing pretty well given all that happened in the Bush era is being dragged down and held back by public-sector cutbacks:

Over the last two years, notes, "The government shrank at an annual rate of 1.4 percent." That meant that though the private sector grew at an average annual rate of 3.2 percent, the economy as a whole grew only 2.3 percent. looks at state and local government spending, which throughout the 1990s contributed to the GDP, and shows that today, massive cuts in local and state governments are creating a drag on the entire economy.

Yet we keep hearing about "out-of-control government spending," often from the same commentators acting mystified about why President Obama can't or won't do more to help the economy and create jobs.

More at Bernstein's economics blog:

ADDENDUM: The US Bureau of Labor Statistic just came out with its latest, nationwide employment cost index. Following is how it broke down. All percentages reflect change over the twelve months from December 2010 to December 2011. Note what happened to pubilc employees across the US, on average (remembering that some of them -- especially in Wisconsin -- did a lot worse and that some of them no longer even have jobs):

Private sector all workers total compensation (includes benefits): Up 2.2% Private sector all workers wages: Up 1.6%State and local gov't all workers total compensation: Up 1.3%State and local gov't all workers wages: Up 1.0%

Now, a one percent salary increase happens to be about two percentage points below the US inflation rate for the same period. Meaning, public workers on average lost more buying power than anyone, whether you consider their salary alone or their total compensation. 

Published

January 31, 2012 - 10:27am

Author

randomness