Valdosta Daily Times

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June 8, 2012

Loss of government jobs could be drag on growth

ATLANTA — Government workers didn’t lose jobs in droves like their private sector counterparts during the recession, but the jobs of thousands of Georgia teachers and postal and social service workers are now threatened, further dampening the state’s tepid economic recovery.

Revenue shortfalls at the local, state and federal levels endanger Georgia’s 673,100 public sector employees — 16 percent of all Georgia jobs. Any significant cuts could reverse nine months of job growth and cause Georgia’s 8.9 percent unemployment rate to rise once again.

The job cuts would likely come in chunks across the state. Metro Atlanta’s major school systems, for example, are threatening to cut 1,800 positions. Collectively, the loss of thousands of relatively well-paid government jobs across Georgia would hurt still-struggling restaurants, beauty salons and county tax coffers.

“We have school bus drivers, five ladies, who come once every two weeks for   lunch,” said Morteza Asgharzadeh, who co-owns Derek’s diner in Marietta, up the road from an elementary school and a postal distribution center scheduled to close. “Every customer helps, even if they just come in for a cup of coffee.”

Since the recession, predictions of job cuts occur every budgetary cycle as cash-strapped governments face declining property- and sales-tax     revenues. So far, layoffs have been minimal. This time could be different, according to labor and budget experts on both sides of the political divide. Nationwide, more than one-fourth of municipalities plan layoffs, according to the Center for State and Local Government Excellence in Washington.

“You’re going to see jobs and services disappear,” said Michael Thurmond, former Georgia labor commissioner. “But the real question is, can you have an economic recovery with the public sector contracting? Historically, it’s cushioned the economic blows and, in some ways, led us out of recession. Now you don’t have that.”

Up to private sector

The private sector will pick up the slack for the loss of government jobs, said Kelly McCutchen, president of the Georgia Public Policy Foundation. An aversion to tax increases will require local governments, like the state government, to cut spending, he added.

“It’s never a good time to cut jobs, but the economy is showing some signs of life. The job market today is better than it was two years ago,” McCutchen said. “The private sector adjusted to the new normal of lower revenues. Government is going to have to make that adjustment too.”

From spring 2007 to this year, the number of Americans holding government jobs fell by 200,000, or just under 1 percent, according to the Bureau of Labor Statistics.   

In Georgia, more than 7,000 public-sector jobs of all types were added during the recession, which technically ended in June 2009. One factor: Pentagon base-shuffling that brought thousands of new federal workers to Fort Benning and Warner Robins.

Not surprisingly, Columbus (Benning), Warner Robins (Robins Air Force base) and Athens (University of Georgia) account for some of the lowest unemployment rates among the state’s major metropolitan areas, according to Georgia Department   of Labor statistics.

State and local governments have trimmed payrolls by about 8,000, or 5 percent, since the recession, however. The decline would have been steeper, but state universities added 4,200 jobs during that time.

Among the hardest hit agencies was Georgia’s Department of Natural Resources, which experienced a 26 percent reduction of full-time jobs over the last five fiscal years.

“The biggest part of it has been the actual reduction-in-force of the most unpleasant kind — they were fired,” said DNR deputy commissioner Todd Holbrook.   

Georgia cities and counties, which employ the bulk of government workers, lopped off 2,000 positions between 2007 and 2012. Public school employment, a separate category, is down about 9,400 statewide.

Counties hurt worst

Two rounds of federal stimulus money that propped up state jobs during the recession has long been spent. A congressional deficit-reduction deal set for enactment in January 2013, barring a new deal to supplant it, will further slash federal payments to states and municipalities.   

Counties face the most pain, however. Property tax receipts keep falling with home values. Schools are still absorbing more than $1 billion in cuts in state funding. Schools and county agencies face ever-higher pension and health care insurance costs.

“It will be years before property tax growth comes back,” said Sally Wallace, who directs the Fiscal Research Center at Georgia State University. “There’s still a lot of uncertainty out there. We won’t have as many local government employees, in particular.”

Metro Atlanta school officials, as they work up next year’s budgets, say they may be forced into big cuts in jobs. Gwinnett County, for example, could lop 585 positions.   

In all, the major metro school districts project 1,800 fewer employees come August. In the past, retirements and early retirements accounted for the bulk of the reductions.

Federal workers could get hit hard too. The U.S. Postal Service, facing $14 billion in losses, plans to close more than 200 mail sorting centers —not post offices — across the country, including depots in Marietta, Acworth, Cartersville and Douglasville.

About 13,000 employees work in the centers, though postal officials say attrition, retirements and jobs at other centers should help avoid mass layoffs.   

Still, fewer days of delivery and fewer post offices will mean tens of thousands fewer postal workers in the future.

“When people don’t have jobs, they don’t put money back into the community and commerce is going to go down,” said Yvonne Robinson, secretary-treasurer of the AFL-CIO in Georgia. “Folks can’t buy food if they don’t have money.”

Predictions of major layoffs crop up every budgetary cycle. In 2010, Cobb County targeted 700 teachers for elimination. In the end, 100 lost jobs.

McCutchen, the think tank president, says the sky is indeed falling this time.

“This is real, the moment of reckoning,” he said. “Very tough decisions will have to come this year from all across the state.”


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