Reuters
Brace yourselves: Sequester impact on employment may have been overstated
Deep government spending cuts are unlikely to weigh on employment as heavily as initially feared, with most of the impact reducing hours worked rather than payrolls, according to economists.
The non-partisan Congressional Budget Office last month estimated that the $85 billion in federal budget cuts known as the “sequester,” which started taking hold on March 1, would cost the economy about 750,000 jobs by the end of the year.
Several economists have dismissed the CBO projection as too high and said in the worst case scenario, total job losses would probably be in the region of 300,000, partly because government agencies are likely to reduce hours worked to try to limit layoffs.
Blowback
Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.
Trackbacks/Pings
Trackback URL
Comments
My company is laying people off tomorrow. Major defense contractors in the DC area are furloughing people and laying them off.
How is it that these facts don’t make it to the media?
Meryl Yourish on March 21, 2013 at 1:03 PM
By the way, “reducing hours worked” means employees take a pay cut. It’s not as bad as layoffs, but when times are tight, cutting your income by 10% hurts.
Meryl Yourish on March 21, 2013 at 1:04 PM
In other words, lthey lied as usual.
Old Country Boy on March 21, 2013 at 1:08 PM
I was bracing for the grid to go down. /s
Oil Can on March 21, 2013 at 1:08 PM
I am…stunned…
44Magnum on March 21, 2013 at 1:18 PM
Let’s brace ourselves for… nothing.
BigGator5 on March 21, 2013 at 1:21 PM
“Defense cuts don’t count in our sequester coverage.”
/MSM
Bitter Clinger on March 21, 2013 at 1:27 PM
Well, the article doesn’t say that NO ONE will be laid off, just that the projections won’t be the 750K that the White House said (and probably hoped for). Closer to 300K. But, as I heard someone say on the radio the other day “welcome to the private sector.” Government grew by leaps five years ago, especially in the DC area, while the private sector was laying people off.
But, this is supposed to be good for the economy, right? Because Nancy Pelosi said that collecting unemployment checks was the best way to stimulate the economy. Gee, what will Obama say if the economy does better during sequestration???
sydneyjane on March 21, 2013 at 1:28 PM
These aren’t government workers. These are private sector workers who contract with the government because the government outsourced military work decades ago.
Defense contractors and other companies that have contracts with the federal government have been laying people off for years now. It’s not something that gets covered by either side of the story.
Meryl Yourish on March 21, 2013 at 1:33 PM
“May have”?
Our all-knowing, socialist overlord Maxine Waters made it clear we’d lose 170,000,000 jobs. I guess it is possible that she made some slight error in her calculations but that’s not, technically, an exaggeration. Really really really, just incredibly really smart people can make mistakes too.
hisfrogness on March 21, 2013 at 1:55 PM
True. Ironically, the war was a huge source of Keynesian stimulus along the lines of what Nancy Pelosi wanted to do with the $800 billion dollar Porkulus bill. Just think of how many millions of people got jobs and government contracts due to our Iraq and Afghanistan wars, and how many tens of billions of dollars were pumped into our defense sector.
Outlander on March 21, 2013 at 2:10 PM
The way defense contracting works is that they will hire a handful of workers for weeks, months, years, then lay off a bunch of them when they lose a contract or need to get rid of the dead wood. Everybody that is in the business knows this.I have seen come defense contractors lay off, over time with much press hullabloo, more people than they employ. They hire them in in fits and snatches and lay them off wholesale.
Old Country Boy on March 21, 2013 at 3:01 PM