The layoff dilemma

April 08, 1991

Part of Governor Schaefer's motive last week in warning of massive state layoffs may well have been political. The governor is still reeling from what he perceives to be the affront of the General Assembly's refusal to adopt his $800 million tax reform package this session. Nonetheless, even if the governor's prediction that 1,700 state jobs are in jeopardy is inflated, an administrative fiscal expert insists the 1992 budget is likely to cause up to 1,000 layoffs -- after attrition is accounted for.

In the overall fiscal picture, the precise number matters relatively little. Whatever state layoffs occur will come on the heels of a round of layoffs in the private sector: Days before Schaefer's announcement, Grumman, confronting cuts in the defense budget, revealed that it will lay off nearly 2,000 workers nationwide, including a yet undetermined number at two Maryland plants. And USF&G, which had already laid off 360 people in January, terminated 225 more jobs here last week.

Clearly, unless the national recession abates, it is unlikely that Maryland's economy can absorb the cadre of unemployed from the public and private sectors. So state lawmakers will face a stinging irony: If Maryland is forced to lay off workers, it will, at best, end up paying unemployment and workers compensation. At worst, if the recession and layoff glut in the private sector prevents state workers from finding new jobs, the state will end up supporting former employees outright, through welfare and Medicaid benefits -- which means that instead of paying people to be productive, Maryland may end up paying them to stay home. That would, of course, represent some fiscal savings. But the overall social loss would be incalculable.

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