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Detroit Mayor Dave Bing’s proposal to cut 2,566 city jobs will result in $128 million in estimated lost payroll for the region, but four economic analysts agreed Monday that failing to slash jobs and balance Detroit’s budget would hurt the economy more.
The initial impact could be up to a $128 million reduction in disposable income, said Scott Watkins, senior consultant with the Anderson Economic Group in East Lansing, who based the figure on a guess that the average city worker annually makes $50,000 in salary.
Laying off almost 2,600 city workers eventually might mean a tenth of a percentage point jump in Metro Detroit’s unemployment rate of 10.2 percent, according to figures from the U.S. Bureau of Labor Statistics.
Failing to slash the jobs would be more devastating, said Patrick Anderson, founder and CEO of the Anderson Economic Group.
“If the city can’t pull out of its financial tailspin, that will have a larger negative impact on the economy than the short-term impact of city job cuts,” Anderson said Monday.
Read more from this article by Karl Henkel and what other analysts had to say in The Detroit News
