•Press Release Economic Crisis and Recovery Government US Workers
Massive State and Local Budget Shortfalls Mean Deep Cuts, Possible Bankruptcy
Washington DC — As financially strapped state and local governments cut jobs, those who lose their jobs in the public sector are 20 percent more likely to be Black than workers who lose their jobs in the private sector. This is part of a new analysis released today by the Center for Economic and Policy Research (CEPR).
In 2019, 14.0 percent of state and local government workers were Black, compared to 11.7 percent of the private sector workforce. If state and local governments go bankrupt, this could also lead to cuts in the pensions of retired state and local employees. These retirees are even more disproportionately Black than current workers.
It will take at least $500 billion to make up the budget gap facing state and local governments, and the shortfall could end up being twice this size, according to Hayley Brown and Dean Baker, coauthors of the analysis.
“At a time when many are trying to show the country is committed to racial justice, a decision by Congress to force large cuts in state and local budgets would be a big step in the wrong direction,” said Brown.