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Wait until April, when sequester kicks in. Then we'll really be having fun!
But that isn't going to impact the unemployment rate as much as one would think. Those employees aren't being added to the unemployment rolls, they are getting a cut in pay in the form of a 32 hour work week. Don't think for a moment that factor didn't play into the decision to do it this way.
A 1% cut to our budget sends our economy into a tailspin?
I did not say that. I was talking unemployment. Private sector jobs are expanding. Public sector jobs are contracting. That is one reason why UE is so high. Most federal money goes to salaries, or to contract employees.
This is the opposite of under GW Bush. He was not able to grow the private sector, but hired public sector employees like crazy. Both sectors need to be healthy to lower the UE rate.
But that isn't going to impact the unemployment rate as much as one would think. Those employees aren't being added to the unemployment rolls, they are getting a cut in pay in the form of a 32 hour work week. Don't think for a moment that factor didn't play into the decision to do it this way.
Not necessarily. Furloughs are only one strategy as cost-cutting. There are hiring freezes in place. Seasonal and temporary positions eliminated, and retirements that are not being refilled. Most agencies are heirarchical, like businesses, they protect the senior, expensive staff, and throw the more numerous, lower paid staff under the bus. So, while a senior manager, earning $150k a year will not get furloughed, five seasonals or admin staff positions will not be filled this year. You'll have the old dogs sitting in their offices, not doing what the agency is supposed to do. That is the way it works.
And of course, all the people who depend upon federal customers will be affected. I am not sure how quickly this will play out, but it is not going to get radically better this Spring. It will most likely get marginally or notably worse.
None of this is the end of the world, of course, but it will affect UE. Bet on it.
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