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November 20, 2009 By Hilton Collins
State and local governments will be forced to lay off more workers and slash spending over the next few years because of budget shortfalls caused by lower tax revenues from the recession, according to a report from the Economic Policy Institute released Thursday, Nov. 19.
The ripple effect will threaten government contracts with companies and the accompanying private sector jobs.
"If you cut a policeman, you're also cutting demand for a lot of the supplier industry," said Ethan Pollack, a fiscal policy analyst for the Economic Policy Institute, a nonprofit and nonpartisan group that conducts research on economic activity.
Theoretically this means the supplier of that officer's uniform, car or other equipment and accessories will have less business.
Pollack authored the briefing paper released Thursday titled "Dire States: State and Local Budget Relief Needed to Prevent Job Losses and Ensure a Robust Recovery." It paints a sobering picture for the future of the country's labor and unemployment.
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