Tags: jobs | cuts | congress | budget

States Brace for Possible Job Losses

Wednesday, 18 Jul 2012 04:33 PM

By Greg McDonald

States across the country are bracing for big job losses early next year if Congress fails to resolve the budget crisis, but Virginia — right next to the nation’s capital — would be the second-hardest hit after California.

The Richmond Times-Dispatch reported Wednesday that Virginia could lose more than 207,000 jobs immediately as a result of automatic spending cuts if Republicans and Democrats fail to reach an agreement by Jan. 2 under the Budget Control Act.

That translates into nearly $11 billion in lost labor income for the state.

Citing an analysis of possible lost government contracts, the Times-Dispatch said Texas would be the third-most impacted, followed by the District of Columbia. Neighboring Maryland would round out the top five  hardest-hit areas, given its large spillover of federal government departments, bases and contracting firms.

Overall, the analysis — prepared by George Mason University economist Stephen Fuller and Richmond-based Chmura Economics and Analytics — indicates that job losses across the country could total more than 2 million, impacting everything from defense contractors and border security operations to education.

The cuts would reduce the nation’s domestic product by an estimated $215 billion in 2013.

“If they are allowed to occur as currently scheduled, the long-term consequences will permanently alter the course of the U.S. economy’s performance, changing its competitive position in the global economy,” the report stated.

The Times-Dispatch noted the report, which mirrors a number of other cautionary studies, was released “amid a cacophony of election-year demands and partisan backbiting over how to avert the impending cuts that will only grow louder in coming weeks.”

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