BTC Statement: State Jobs Numbers Released on Wednesday Signal North Carolina is on the Wrong Path
State Jobs Numbers Released on Wednesday Signal North Carolina is on the Wrong Path
A whole-budget analysis shows that, over a two-year period, cuts will cost the state 30,000 public- and private-sector jobs
And that brings us back to the ripple effect of job loss. The most significant omission in the discussion of public-sector job numbers is the impact these will have on the private sector. Budget cuts affect private businesses in two ways. First, businesses suffer because their customers—those laid-off public-sector workers—no longer have money to spend, and the high unemployment rate means many of these workers will struggle to find new jobs. Secondly, much of the money that state government pays for public services goes to private businesses; for example, money spent on Medicaid goes to doctors, hospitals, therapists and others.
The N.C. Budget & Tax Center conducted a whole-budget analysis of the net effect of spending cuts and tax cuts in the final budget using industry-standard economic modeling. The findings estimate that over the next two years the state is likely to lose nearly 30,000 jobs, on net. Nearly half of these jobs will be lost in the private sector, the vast majority in the health care industry.
The OSBM numbers released on Wednesday give us one measure of the impact of state budget decisions. These impacts will be varied and long-lasting. What is clear, however, is that continuing down this path will lead us further from a strong economic recovery.