* State, local governments shed 30,000 jobs in February
* More cutbacks coming down the pike
* Wisconsin governor threatens more layoffs
By Lisa Lambert
WASHINGTON, March 4 The jobs outlook is growing
dimmer and dimmer for the U.S. public sector.
Federal employment data released on Friday shows that state
and local governments are shedding thousands of jobs even as
Republican political leaders say more layoffs are on the way.
In February, state and local governments wiped 30,000 jobs
off their payrolls, mostly in education, the Labor Department
said. Since employment levels peaked for public sector workers
in August 2008, 450,000 jobs has been shed, almost entirely at
the local level, according to the Economic Policy Institute, a
"State budgets are in bad shape and that means you're going
to see more cutbacks," said David Wyss, chief economist for
Standard & Poor's, who expects state and local governments to
lose about 300,000 jobs this year. "The biggest impact will be
in the fall, because 'back to school' is going to be 'back to
school with fewer teachers.'"
Public schools start their new class years in the fall, but
Wyss said schools may have let personnel go in February in time
for the spring semester. He expects governments to cut jobs in
all areas of public employment, including firefighting.
The public sector layoffs are in deep contrast to the
private sector, where employers hired 222,000 workers in
For more on the report, please see [ID:nOAT004757]
The country is pitched in a deep battle over public
employees that has inspired thousands of demonstrators to
descend on the capitals of Wisconsin and Ohio.
On Friday, Wisconsin Governor Scott Walker, a newly elected
Republican, was poised to issue layoff notices to 1,500 state
workers, blaming a two-week stand-off over his bill to curb
union collective bargaining rights. Earlier this week he
proposed a budget that would eliminate 21,000 positions and cut
funding to education, cities and counties.
For more on Wisconsin, please see [ID:nN04178641]
Republican governors in Ohio and Indiana are watching
Walker's steps closely as they propose rolling back public
employee union power in their budget-cutting efforts.
Even though most of February's public sector layoffs were
at the local level, they were partly caused by state budget
cuts. Because their revenues have been slow to recover from the
recession, states have pared funds for local governments. The
National Association of Counties recently found reduced state
aid is the top cause of counties' income woes.
The federal economic stimulus plan passed in 2009 included
money to prevent states from slashing education programs. But
those funds run out this summer, which will likely force many
school districts to cut more teacher jobs.
"The weak spot in the economy remains budget troubles for
state and local governments," said Richard Trumka, president of
one of the largest unions in the country, the AFL-CIO, in a
statement. "Without some relief from the federal government,
state and local layoffs could undermine prospects for sustained
Wyss said he expects weakness in the state and local sector
to shave half a percentage point off national economic growth
in the second half of 2011. But, he added, he anticipates
private sector hiring to pick up enough to balance out any
losses in the public sector.
(Additional reporting by Jeff Mayers; Editing by Dan Grebler)