For Immediate Release
Tuesday, December 12, 1995
New Report finds that GOP Reconciliation Bill Will Result in Major Job Losses
Washington, DC —The Reconciliation Bill vetoed by President Clinton last week would result in the loss of 2.2 million jobs by the year 2002, according to a study conducted by a nationally recognized economic forecasting firm. More than half of the jobs lost would be in the health care industry, as a result of $433 billion in GOP-proposed cuts to Medicare and Medicaid.
The report, conducted by Wharton Econometrics Forecasting Associates (WEFA), projects that by the year 2002 unemployment would rise to 7.5% -- 30 percent higher than the current rate of unemployment. In addition, the report projects that the bill would not balance the budget by the year 2002, since lower interest rates will not generate the economic growth predicted by the Congressional Budget Office.
The study was commissioned by the 1.3-million-member American Federation of State, County and Municipal Employees (AFSCME).
"This study shows that lower interest rates are not the magic bullet Republicans would have the American people believe," said AFSCME President Gerald W. McEntee. "The Republican members of Congress would balance the budget by destroying more than two million jobs and raising the unemployment rate to 7.5 percent. Their plan leaves millions of Americans jobless, making it impossible for those families to take advantage of lower interest rates to buy a house or send their kids to college."
McEntee said that without improved job security, health care coverage and higher wages, "the typical American family will find small comfort in lower interest rates. For workers in the health care industry, and the communities that depend on health care employment, the pain caused by the GOP plan would be especially acute."
According to the WEFA report, health care jobs tend to pay about ten percent higher than wages overall. The loss of 1.2 million higher paying jobs would impact some communities especially hard. The report outlined the effect that cuts to Medicaid and Medicare would have on specific states, especially California, Florida, and Pennsylvania.
In California, for example, over a half a million jobs would be lost as a result of the Republican budget plan by the year 2002. Nearly 25% of these would be in the state's health care industry, which currently employs just over one million workers. Over the next two years alone, under the GOP plan, California's health care industry would lose approximately 25,000 jobs.
Florida's health care industry currently employs nearly 600,000 workers. According to the report, there would be a 11% drop in health care employment in Florida by the year 2002, with more than 90,000 jobs lost. In total, more than 327,000 jobs would be lost from Florida's economy. Medicare and Medicaid cuts would have a substantial impact on the state's health care industry, especially given Florida's sizable retiree population.
Pennsylvania would lose as many as 340,000 jobs by the year 2002, under the GOP plan. Nearly 25% of jobs lost would be in health care. Over $32 billion in wage and salary income would be lost from Pennsylvania's economy over the 7 year period if the Republican budget plan were enacted. The state's unemployment rate would rise to 8.2%, well above its current level of 5.9%.
"This study illustrates the unequal sacrifice that would be required by some states -- and by working Americans in general -- in the Republican agenda for balancing the budget," McEntee said. "These cuts would not only affect workers in the health care industry, and their families, but would affect the quality of health care and jeopardize access to health care services for millions of Americans."
American Federation of State, County
and Municipal Employees, AFL-CIO
1625 L Street, N.W., Washington, D.C. 20036-5687
Telephone (202) 429-1130
Fax (202) 429-1084
