Columbus’ Biggest Jobs Sector Poised To Shrink.

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For decades Central Ohio leaders touted the region’s economy as balanced, not as prone to the hazards of economic downturns as other regions of the state. Now, Columbus’ largest employment sector….state and local government….faces contraction as budget deficits at the statehouse and at some local school board and municipal offices force cutbacks. WOSU’s Tom Borgerding reports.

A look at the Columbus Chamber of Commerce’s latest regional economic snapshot shows 160,000 government workers in the local labor force. That’s 18% of all people employed in Franklin and surrounding counties. In 2011, the chamber predicts nearly 1,000 of those workers will lose their jobs. Economist Bill Lafayette says government contraction “cannot be good” for the local job market.

“I don’t think that we can count on state government, education to save us as we go into 2011. I think that that’s going to be much more of a problem than it has been.”

Economist James Newton of Commerce National Bank predicts government job losses in Central Ohio will be even worse this year, perhaps as high as 1,500. Newton says there’s just no way around the projected $8,000,000,000 budget hole at the statehouse.

“Unless you are going to tax people to the point where all they do is earn their money and hand it over to the government, $8,000,000,000 is a huge, huge hole to try and dig yourself out from under. It has to come largely from spending cuts. And, part of that is going to be the services that we’ve taken for granted, not going to be there as readily as in the past.”

Newton and Lafayette made their comments at the Columbus Metropolitan Club. Newton says some local governments, like the cities of Columbus and Delaware are better positioned to keep services intact where voters have given more financial support. Joseph Mandeville, vice president of Red Capital Group sees a possible upside in government contraction.

“And its hard to put a silver lining on job losses, obviously. But if you were to look for a silver lining in terms of government job loss it would be an improved fiscal picture is certainly a good thing just in terms of business investment.”

Mandeville says keeping a lid on taxes and giving more fiscal certainty to businesses in the region might spur expansion and some job growth in the private sector.

Tom Borgerding WOSU News