WGXC-90.7 FM

Last year's state job cuts hurt the local economy; this year's coming cuts could end up much worse

Jan 21, 2011 7:11 am
So just how hard are the proposed Cuomo staff cuts of between 12,000 and 15,000 going to hit? We've already seen what happens when 40 or so jobs get downsized or shifted from full to part time hours over in the Catskills and DEC-run Belleayre Mountain Ski Center, and the community rallies in support of local employment. Now, Chris Churchill of the Times Union has a story out about how The Capital Region's job market took a step backward in December, with reductions in state government employment from last year already swamping meager job growth by private companies.

State government shed 3,300 Capital Region jobs over the course of last year, or 6.4 percent of its total local employment, according to new numbers from the state Department of Labor. The private sector added just 300 jobs during the year, a number that surprised and disappointed analysts who had hoped non-government employers would carry the economy through to better times. The local unemployment rate for December was 7.0 percent, just a tick up from the 6.9 percent for the same month a year earlier. Both rates set records as the highest for the month since 1990, when the labor department began tracking Capital Region data. But the unemployment rate would have been much worse if not for a sharp fall in the number of people in the labor force.

Governor Andrew Cuomo spoke at Marist College in Poughkeepsie yesterday about his proposed cuts to government employment, but refused details for now, saying they'd be in his first state budget when it's released in the coming weeks.

There are several possible causes for the shrinkage of the labor force, including an increased rate of retirement. But the trend probably doesn't say anything good about the economy.

"I think it means the market is so bad that people are giving up on looking for work," said James Parrot, chief economist for the Fiscal Policy Institute, an independent Albany group. "They're frustrated and discouraged."

Just a few months back, private Capital Region employers had begun to pick up their pace of hiring, providing a counter-balance to state job cuts.

Now, it's possible that the threat of additional state layoffs, as suggested by new Gov. Andrew Cuomo, is leading companies to shy from hiring.

Ross noted that the Capital Region was the only metropolitan area in the state to show declining consumer confidence -- which is the willingness to spend on big-ticket items -- in a recent poll conducted by the Siena Research Institute.

"It could be that the talk of government layoffs is pulling people back a little bit," Ross said.

Some reports suggest that Cuomo could seek to cut 10,000 to 15,000 state jobs -- a reduction that would have an oversized impact on the Capital Region.

Cuomo, speaking at Marist College near Poughkeepsie on Thursday, didn't address how many jobs his upcoming budget would seek to cut.

"I don't think it's going to be any surprise to anyone that the state's financial condition is dire," Cuomo said. "The chickens are coming home to roost."

The statewide unemployment rate in December was 8.0 percent, a significant improvement from the 8.8 percent rate of a year earlier.

Still, the labor department said New York lost 22,600 private-sector jobs in December.

"Job growth in New York has been inconsistent month to month during the economic recovery," said Norman Steele of the labor department's Division of Research and Statistics.

That's not unusual. Many states -- and the nation overall -- have been struggling with job growth, leading some to characterize this as a jobless recovery.

"As bad as things look here (in New York)," said Parrot, "we are not worse off in terms of unemployment and the labor markets compared to most states."

Likewise, unemployment in the Capital Region is better than in most upstate metropolitan areas.

The Buffalo-area unemployment was 8.2 percent in December, while it was 7.8 percent in Rochester and 8.3 percent in Syracuse.