Unemployment Rate Would Be 7.1 Percent Without Government Job Cuts: Report
By Bonnie Kavoussi
05/08/2012
The unemployment rate would have been 7.1 percent without government austerity, according to Labor Department data cited by The Wall Street Journal.
In an analysis sure to bolster austerity critics, Justin Lahart at the Wall Street Journal crunched April's jobs numbers and discovered that if not for government job cuts since the financial crisis, the unemployment rate would have been at a more sustainable 7.1 percent in April.
That's 12 percent lower than April's 8.1 percent jobless rate.
The government has slashed its workforce by 6 percent since December 2008, putting 1.2 million workers out of a job. In Congress, many are arguing for more cuts in government spending.
Theoretically, the unemployment rate would have been even lower, tweeted University of Pennsylvania economics professor Justin Wolfers. He mentioned the "fiscal multiplier" effect--if more workers were employed by the government, their spending would have created more jobs in other parts of the economy or at least prevented those jobs from getting cut -- a factor that the WSJ analysis doesn't account for...
For the full article, go to:
http://www.huffingtonpost.com/2012/05/08/unemployment-rate-government-austerity_n_1499868.html
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