Attack on Public Sector in North America will Deepen the Economic Crisis in 2010

paul-garver-edited by Paul Garver

Talking Union has not paid nearly enough attention to the growing impact of the economic crisis on the public sector and on public sector employees. Many of our readers belong to public sector unions, while all of us have already been hurt in one way or another by increasingly savage cuts in education, health, welfare and other public programs. Over the next year combatting these negative impacts must become a focus for union and political organizing, in particular at the state, local and provincial (Canada) levels.

To encourage a wider discussion, we are excerpting below three recent articles from the USA and Canada. We encourage readers to send us their ideas about organizing to defend the public sector and reports on their local activities.

Public Sector Workers: The Recessions Next Victims?
— Andrew Jackson, economist for the Canadian Labour Congress

I fear that Tom Walkom of the Toronto Star is bang on when he argues that
the next victims of the recession will be public sector workers. As he

“The federal government has already signalled plans to get tough with its
workers. In Ontario, Premier Dalton McGuinty gave notice this week that the
province’s public sector including nurses, doctors, teachers, police
officers and judges will no longer be sheltered’from recession. New
Brunswick plans to cut 700 civil service jobs, while Alberta’s provincial
government is asking its teachers and health-care workers to accept wage

The biggest target promises to be the unionized public sector.
Approximately 70 per cent of Canada’s 3.3 million public sector workers are

Here, the hammer will again be the deficit. Governments, faced with
declining tax revenue and on the hook for so-called stimulus spending, are
already announcing plans to cut back. With few social programs left to
slash, expect them to directly attack unionized public sector wage bills.

The Bullet, A Socialist Project e-bulletin, No. 274, November 16, 2009
Museum Workers at War:
Precarious Employment and the Public Sector Squeeze

–Priscillia Lefebvre

The casualization of labour has placed many workers in a position of
precariousness forcing them into a state of perpetual insecurity
characteristic of the new economy neoliberal nightmare. In an effort to
reduce production costs and maximize profitability, many employers have
adopted a neoliberal approach to employment, which is achieved through the
temporary and discretional use of labour, major layoffs, the retrenchment
of wages, workplace intensification and the denial of benefits. The result
of which has brought real wages to a near stand-still over the past
twenty-years, as well as a growing chasm between worker productivity and
the compensation that follows.

The battle for wage parity and job security rages on in Ottawa between the
Canadian Museum of Civilization Corporation (CMCC), which operates both the
Canadian Museum of Civilization and Museum of War, and the 92% of fed up
workers who voted in favour of a strike. The current strike by 420 Public
Service Alliance of Canada (PSAC) members is the longest running labour
strike in PSAC history. The workers have been on strike for more than 60
days after initial attempts to bargain for a fair collective agreement came
to a halt on September 18th of this year.

The Bullet, A Socialist Project e-bulletin, No. 278, November 24, 2009
I suggest that you subscribe to this Bulletin

State and local budget shortfalls will cause heavy drag on growth
by Ethan Pollack (Economic Policy Institute)

The recession has led to large budget shortfalls for state and local governments, which unlike the federal government, cannot run deficits. To balance their budgets, they must cut spending and/or raise taxes. These actions depress consumer demand, cause job losses (a majority of which will be in the private sector), and in general create a drag on the economy.

After drawing down rainy day funds, states face a two-year $357 billion budget shortfall for the fiscal years 2010 (which began in July) and 2011, while local governments face an additional $80 billion shortfall. The American Recovery and Reinvestment Act passed last February has provided much-needed relief, but its $106 billion in aid to states totals only about 25% of the $437 billion state and local shortfall. The rest of the $331 billion has to be met by spending cuts and tax increases. Spending cuts would be particularly harmful to the economy. Not only do they deprive individuals of needed public services like health care, transportation, education, and safety, they also fall disproportionately on the backs of low-income individuals, who respond by cutting their spending. Businesses’ sales then fall, forcing firms to slash wages or lay off workers, and these workers then cut their own consumer spending. As a result, each dollar of spending reduction by state and local governments leads to $1.41 in lost economic activity.

Without additional state and local budget relief, current and future shortfalls will cause millions of job losses and likely contribute to a drawn-out and painful recovery.
At this point, Congress has a choice. On the one hand, it can do nothing, thereby forcing states and local governments to cut budgets and raise taxes by hundreds of billions of dollars over the next few years. The result will be a drag on the economy that will at best lead to a long, painful, and relatively jobless recovery
and at worst cause enough damage that the economy reverses course and begins to contract again.

AFL-CIO Blog, November 20, 2009

One Response

  1. Caveat Lectores and I have been commenting on the anticipated plight of public sector employees for years. Too many of the employees and their union leaders think they are immune from what happened to the private sector employee. Guess again.

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