State and Local Governments Are Shedding Jobs. Can Congress Prevent a Catastrophe?

State and local governments are hemorrhaging jobs and it’s not clear when, or if, more federal relief will come.

As the Los Angeles Times reports, public sector employment declined by 571,000 jobs in May. That figure came on top of 964,000 state and local job losses the previous month for a total of 1.535 million.

Economists who spoke to the Times said Congress must step in. If they don’t, the problems of states and cities will become a drag on the entire economy, making a recovery more difficult.

Josh Bivens of the Economic Policy Institute points to the Great Recession of 2008. He says the recovery would have been swifter if state and local spending hadn’t been forced to decline so much.

By 2021, Biven estimates 6 million jobs could be saved by more federal aid. But that would require support from Senate Majority Leader Mitch McConnell (R-KY) who has preemptively derided any so-called “blue state bailouts.” And of course, it would need sign off from the president.


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Finance

Monday, July 27, 2020 - 15:51

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