Friday, August 19, 2011

The Walker Budget Is Already Working! Part VIII

The job numbers for July are out and they're starting to show us a glimpse of the full glory of Scott Walker's budget, which he foisted upon us with the willing help of this Republican colleagues in the legislature.

The state lost 12,500 jobs in the month, the second highest number since the recession started.  The only time we had a greater job loss was at the beginning of the recession when the state lost 22,900 jobs.  This was, of course, when we got to see, on a national level, the full impact of the benefits of George W. Bush's years of tax cuts for the rich.

Walker, who tried to take credit for all the jobs created in June (even though the unemployment rate actually rose), was now backpedaling like crazy and putting the blame on everything but sunspots:
Wisconsin lost 12,500 private-sector jobs last month in the deepest single-month decline since the depths of the 2008-'09 recession, effectively annulling most of the previous month's gains.

Gov. Scott Walker, who last month credited his administration's business-friendly policies for big job gains in June, attributed the July job losses to turmoil in the national and international economy as well as to uncertainty created by the state's special recall elections.

Asked whether he should be held accountable for July's decline as long as he also wants credit for June's gain, Walker responded by describing what he called "incredible uncertainty both at the federal level - in terms of the debt ceiling and all the tension of that, and the negative impact that had on the economy - combined with July and August, when you saw the height of the recall commercials. And I think for a lot of employers we talked to, that created a high level of uncertainty, not knowing what was going to come next."
Even more flabbergasting is the response of one of Walker's corporate masters, the WMC, who tried to blame the recalls for the large drop of jobs.

It also needs to be pointed out that the numbers would be a helluva lot worse if not for the fact that the federal and local governments had added a total of 4,400 jobs (even as Walker cut the state's level by another 100 jobs).

And while it has been shown that most of the jobs created in June were the temporary jobs associated with tourism, the jobs lost last month were across the board, with a large part of them coming from the service industry.  This was predictable and was already explained by yours truly as I pointed out the foolishness of right wing blogger Owen Robinson's gloating of public workers having their pay unilaterally slashed under the Walker plan:
Consider this: In Milwaukee County alone, there are somewhere around 48,000 government workers, including state, county and all the municipal employees. Walker's union busting will remove $155 million from the local economy, because that's the money that these workers won't have any longer to spend.

The people that get hurt by this are the owners and employees of the small stores, restaurants and taverns, since those are the areas people first cut in their personal budgets. Then bigger companies will feel the pinch, like cable companies, as people realize that they'll need to cut back on luxuries. Also, big ticket purchases will drop, which will lead to things like more real estate problems and less cars being sold. And you know the companies aren't going to allow a hit to their profit margins, so that means they raise rates and/or lay off workers.

The estimates of people in the private sector that are going to lose their jobs just from this one bill is continuously being added to, but the latest I've seen is 31,000 people around the state will lose their jobs because of this decrease in flow of money. To be honest, even that number seems low to me.

So, now we have teachers and other public employees making even less money (even though they already were making less than their private sector counterparts). This, in turn, has a negative impact on local businesses, causing further job losses, a further drop in spending and so the downward cycle continues. Not exactly what I call "a positive impact," but that's the whole problem with the right's trickle down economics theory, isn't it? Something's trickling down, but it sure as hell ain't money, much less enough to keep the economy going or growing.
And this is just the beginning, folks.

The numbers reflected in the July loss of jobs comes has people are only starting to cut back on their spending. This week, many local workers got to see the full impact of the Walker plan, with their pay cut up to 17% Next week, state workers get to take their first hit. Shortly thereafter, the teachers will get their turn.

By this time next month, you'll have tens or even hundreds of thousands of people across the state having their pay cut, and not quite the modest levels that Walker would have you believe them to be. Obviously, this means that there is going to be a sudden cut back in spending by the public sector employees, which in turn means that there will be less money in circulation in the state.  This will deepen the impact on the businesses, both large and small, as pointed out in the cited section above.

Add to this the fact that the tourism season is wrapping up for another year, and things start looking even glummer.

Of course, Walker and his Republican accomplices will never, ever accept responsibility for the consequences of their actions and for the problems headed our way.  But that doesn't mean we can't see through their lies and know who's really responsible.

If Walker thinks in any way that the is immune to being the subject of a recall, the look on his face when it happens should be priceless, which is fortunate, since many of us won't be able to afford it at any price.


  1. From the very beginning I have said that the impact to local economies of the reduction in income for public employees will be enormous. Those very people who were so SMUG about public employees losing income will be among those who become unemployed when their businesses close or their jobs go away. That is the only bright spot in this whole mess -- that some of the smug are going to be hit too. I won't be feeling sorry for THEM though.

  2. I've already got my Excel program set up, and am keeping track of just how much money little old me is no longer adding to the economy. First hit will be my local grocer, on a weekly basis, but everyone who no longer benefits from what little disposable income I had before will make the list at one point or another. I'm interested to see what the numbers look like by the end of the year.