Federal employee wage freeze expected to impact area’s economy by $200M annually

By City News Service

President Barack Obama’s plan to freeze wages of most federal workers for two years will cost the San Diego-area economy nearly $200 million annually, an economist said Wednesday.

Kelly Cunningham of the National University System Institute for Policy Research estimated the direct loss at $108 million — pay that would going to federal employees if they got raises — and the overall loss to the regional economy at $190.3 million. The larger figure includes the loss of direct compensation and the effects of reduced spending.

“Our economy was estimated to be $170 billion in 2009, so a total of $190 million is a little over 1 percent of that,” Cunningham said. “In a struggling economy, that’s another blow.”

Cunningham said he calculated the wages of local federal workers, compared to pay increase data since 2007 to arrive at his conclusions.

Despite the cost to the local economy, the $5 billion savings to the federal government is needed to control debt, he said.

The proposed pay freeze does not include postal workers or members of the armed forces, though civilian employees of the Defense Department will be affected.

The federal government employs about 37,000 people in the area, excluding postal employees, he said. On average, Cunningham said, people working for the federal government make about 1.5 percent more than privately employed people in similar jobs.

Related posts:

  1. San Diego economic indicators remain unchanged for third month
  2. Economic indicators for San Diego show slight dip in September
  3. Unemployment rate in county was 10.6 percent in August
  4. COO: If tax measure fails, city faces $23 million in cuts
  5. Report: Nearly 1/3 of SD residents make less than cost of living

Short URL: http://www.lajollalight.com/?p=29966

Posted by Halie Johnson on Dec 1, 2010. Filed under News, Region. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

Leave a Reply

La Jolla Community Calendar

Facebook

Bottom Buttons 1

Bottom Buttons 2

Bottom Buttons 3

Bottom Buttons 4

Bottom Buttons 5

Bottom Buttons 6

RSS North Coastal News

  • Last year for Del Mar Union School District transitional kindergarten August 1, 2014
    The Del Mar Union School District is entering the last school year where it will be required to offer transitional kindergarten class — so far. Legislation is pending that would make it mandatory for districts to offer the program to low-income students. DMUSD’s transitional kindergarten (TK) serves a quarter of its population and to date will bring an addit […]
  • Friends of Gonzales Canyon spruce up Carmel Valley site August 1, 2014
    On July 19, Friends of Gonzales Canyon volunteers helped paint a new kiosk in the Carmel Valley canyon. […]
  • Solana Beach water district receives national award in financial reporting for eighth year August 1, 2014
    The Government Finance Officers Association of the United States and Canada (GFOA) presented the Santa Fe Irrigation District the GFOA’s Certificate of Achievement for Excellence in Financial Reporting for the District’s Comprehensive Annual Financial Report (CAFR). This is the eighth year successively that SFID has received this award. The Certificate of Ac […]