Report Warns of Severe Job Cuts in Local Communities

WASHINGTON, D.C.—(ENEWSPF)—May 27, 2010. Facing tight budgets as the result of recession, local communities are set to lay off another 222,500 workers beginning this summer, threatening to overwhelm the recovery, according to an analysis released today by the Economic Policy Institute.

“This massive job loss will harm far more than the public servants who face unemployment.  For one, our communities will be deprived of the vital services they deliver.  Schools would see larger classes sizes, our homes would be less protected from fire, and our streets would become less safe,” the EPI analysis said.

Since the recession began, an estimated half-million Americans have lost their jobs in local communities because of tight budgets. EPI estimates that by 2012, more than 400,000 jobs would have to be restored just to return local government services to pre-recession levels.

“Our nation’s economic progress can ill afford another wave of steep layoffs, which have the potential to overwhelm the significant gains our economy has made,” said U.S Rep. George Miller (D-CA), the chair of the House Education and Labor Committee. “In order to sustain our economic recovery, direct assistance to local communities is urgently needed to hold off these layoffs.”   

“Layoffs mean a reduction in critical services, and a reduction in tax revenue,” said U.S. Sen. Sherrod Brown (D-OH), who is drafting legislation to help restore services and prevent lay-offs. “It’s critical that we prevent further economic downturn by ensuring that local communities have the resources they need to maintain services and prevent lay-offs.”

“With states and local governments around the country poised to lay-off thousands of workers in order to balance their budgets, it is imperative that Congress pass legislation to directly create jobs. Members of the Congressional Black Caucus worked closely with Chairman Miller to ensure that the Local Jobs for America Act includes money for on-the-job training and targets funds to communities with persistent levels of poverty and high unemployment rates,” said Rep. Barbara Lee (D-CA), chairwoman of the Congressional Black Caucus. “Americans are hurting and communities are suffering and Congress has a duty to act quickly to deliver relief to those most in need of help.”

Cuts to public jobs also reduce employment significantly in the private sector. EPI estimated that for every 100 public-sector workers laid off, 30 private sector workers are let go because of the reduction in consumer spending in the local economy.

EPI says that it can take up to three years for local budgets to recover once a turnaround takes hold. This forces local governments to choose between cutting important services like public safety and raising taxes during an economic recovery.

House Democrats, led by Rep. Miller, introduced the Local Jobs for America Act (H.R. 4812), which will create up to a million jobs quickly in both the public and private sectors and help restore vital services that families rely on. The bill has 161 cosponsors to date.

The bill – developed with a bipartisan group of mayors, county officials and others – will provide $75 billion over two years to local communities to hold off planned cuts or to hire back workers for local services that have been eliminated because of tight budgets. Funding would go directly to local communities and nonprofit community organizations to decide how best to use the funds.

The legislation also provides $24 billion to states to help support 300,000 education jobs, put 5,500 law enforcement officers on the beat, and retain, rehire, and hire firefighters. The Local Jobs for America Act also funds approximately 50,000 additional private-sector on-the-job training positions to enable workers to acquire core job skills and to help local businesses put people back to work.

Last week, EPI found that the cost of the legislation devoted to local communities would be offset by $39 billion because it would keep taxpayers on payrolls and reduce spending on unemployment and other social safety net benefits.

More information on the Local Jobs for America Act, including estimates on job creation by local communities and support for the bill