Massive layoffs were both a cause and a symptom of the recent recession, but job creation began to revive late last year. Unfortunately, in May, the U.S. added only 58,000 jobs, and layoffs may be on the rise again. This time, they're taking a particular toll on state and local government workers.
The notion that somehow public workers' pay packages are breaking the state budget just don't hold up. These workers' entire compensation package -- salary, health care, pensions, etc. -- make up a tiny fraction of Wisconsin's spending.
If the government budget follows popular sentiment, education, social security and Medicare are safe. Those are the areas where fewest Americans want to see government spending cuts, according to a Gallup poll released Wednesday.
No, it's not a new plague. Rather, it's a little-known economics thesis that explains why uneven productivity gains in different sectors can have a huge impact on everything from consumer spending to government deficits. The latter is the nastiest side effect.