As wages and benefits shrink, state workers are retiring in droves. On top of all the layoffs, these retirements amount to a huge brain drain, and the problem will only get worse given the yawning budget gaps of states from coast to coast.
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.
The economy lost 95,000 jobs in September, because the private sector hired only 64,000 workers while governments cut 159,000. The jobless rate remains 9.6%. Minus the usual boosts from housing and consumers, the U.S. still lacks a catalyst for new jobs.
