March 10, 2011

The Great Recession Is to Blame

By David Madland, Nick Bunker

The conservative explanation for state budget deficits is that employee compensation for public-sector workers is out of control. But a close look at the facts demonstrates these claims are unjustified. Public-sector pay is not the cause of state budget deficits because public-sector compensation did not significantly increase in recent years.

Instead, state tax revenues declined sharply amid the Great Recession—shortfalls made worse in some states by ill-advised tax cuts for businesses and the wealthy, as happened most famously in Wisconsin before its governor began pushing to eliminate public-sector collective bargaining rights.

In this issue brief, we will detail why public-sector workers didn’t cause budget shortfalls, but they can and are working to fix state budget problems.

Read more and download the full issue brief here.

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