Austerity: It’s Not a Solution—Part I

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The massive nationwide shutdown to stem the spread of the novel coronavirus has had a devastating impact on the economy, our neighborhood public schools and other vital public services. In this first installment of a three-part series, we talk about the reasons why a return to austerity policies would hurt recovery efforts.

As the nation faces a severe state budget crisis triggered by the rapid economic downturn created by the coronavirus shutdown, AFT leaders are sounding the alarm about the devastating impact of imposing austerity measures to close budget shortfalls. Deficit hawks have pushed disinvestment as a so-called recovery strategy in response to economic crises. In reality, austerity is a tool to starve and destabilize public services to justify and promote privatization schemes.

a protest sign has the word austerity on it with a red x over itiStock/Getty Images Plus/shauni

Austerity policies and disinvestment in the public services people need most during a crisis rarely work. A vital lesson from the Great Recession is that austerity slows economic growth and weakens recession recovery.

“Austerity is a zombie idea that just keeps shambling along, no matter how much it should have been killed by evidence,” Paul Krugman, Nobel Prize-winning economist and columnist for the New York Times, said on a recent webinar sponsored by the Groundwork Collaborative. “By 2013, we already knew that cutting spending in a depressed economy was a really bad idea.”

The full impact of the current economic crisis is still unknown, but early projections indicate revenues for most states could fall as much or more than they did in the worst year of the Great Recession. Still, union leaders say now is not the time to boost revenue by cutting public services when people need them the most.

“Austerity is the antithesis to every lesson we have learned about what our schools and students need to be successful. It would be a recipe for disaster,” says Texas AFT President Zeph Capo. “We’re wringing our hands right now thinking about kids falling behind because of lost instruction time, not to mention the social and emotional stress they are dealing with because of this pandemic. How will austerity measures help any of that?

“The fact is that we’re going to need even more resources—not cuts—whenever we do get back to normal to address the issues our students are facing during this pandemic,” says Capo, an AFT vice president.

New investments in public schools and services are what most Americans want. A recent poll conducted by the AFT; the American Federation of State, County and Municipal Employees; and Hart Research Associates shows that a supermajority of Americans believe significant federal funding is needed to help states, cities and towns to address the catastrophic economic effects of the coronavirus pandemic. In interviews of more than 1,000 likely voters, the poll found that federal support for state and local services is a top priority for voters. They also favored investments in education, healthcare and other public services as a priority over keeping down government spending and debt.

Leading economists say that without federal aid, state and local governments might repeat the mistakes of the Great Recession and make cuts that actually hinder economic recovery. An examination of how states fared during and after the economic downturn of a decade ago shows that states which preserved or expanded their public sector workforce weathered the recession better and came out with fewer overall job losses, fewer private sector job cuts, less growth in unemployment, and faster job growth during recovery. It also found that states that cut state and local government employment lost, on average, 1.3 percent of jobs outside of state and local government. Laying off state and local government workers also threatens private sector jobs that depend on the spending of public sector workers. Economists also warn that firing teachers would harm recovery and threaten our future. Severe budget cuts to K-12 education would hurt the economy, undermine long-term growth, and increase inequality and discrimination, economist Richard McGahey argues.

Austerity is a political choice.

“Austerity is not just an issue of economics,” says Kim Phillips-Fein, a historian at New York University and author. “It is a way of describing a politics, a sense of what matters, who matters.”

Texas AFT President Capo and other affiliate leaders say they hope elected officials have learned lessons from the Great Recession, when lawmakers chose austerity policies. Those policies led to years of disinvestment in public education and services that decimated funding for schools and other supports. More than a decade later, schools and communities still have not recovered from chronic disinvestment, even as they struggle to cope with the current crisis.

In the space of a few months, the national unemployment rate has hit levels not seen since the Great Depression, and some economists predict the country may be heading into the worst recession in almost 90 years.

“One of the lessons learned from the Great Recession is that you don’t just recover,” says Ed Muir in the AFT Research and Strategic Initiatives Department. “We came into this recession with 20 states still spending less on education and with fewer people working in education” than in 2008 at the height of the recession.

The lasting effects of chronic disinvestment in public education, from kindergarten through higher education, is detailed in “A Decade of Neglect: Public Education Funding in the Aftermath of the Great Recession,” a 2018 AFT report. In March 2018, the AFT launched Fund Our Future, a comprehensive campaign of national, state and local actions to demand full funding for public education.

“We have a lot of great things going on in our schools, but because of years of underfunding at the federal and state levels, we’ve had waves of layoffs over the years that have created across-the-board school staff shortages,” says Samantha Rosado-Ciriello, president of the Yonkers Federation of Teachers in New York. Yonkers, the fourth largest city in the state, has a school district that serves nearly 27,000 students, Rosado-Ciriello says.

She points out that there is one school psychologist for every 820 students, one social worker for every 1,881 students, one school counselor for every 850 students, and one English language learner teacher for every 332 students. Several schools don’t have librarians, a library or a school nurse, which Rosado-Ciriello says seems even more problematic in the times of COVID-19.

“We’re already working with a skeleton crew, and now we’re facing another 200 layoffs of school employees,” if the district doesn’t receive sufficient federal funding, Rosado-Ciriello warns. “That means, when schools finally do reopen, there will be even less support for students at a time when they will need help the most.”

According to job-loss reports for April, 468,000 public education jobs have been cut, which means more jobs were lost in one month than during the Great Recession. The job loss for hospitals is at 130,000. Because hospitals have stopped performing elective procedures, they have been furloughing and laying off workers, rather than redeploying them to treat COVID-19 patients. And overall, there were 980,000 public sector jobs lost. The Department of Labor reports 20.5 million people lost their jobs abruptly. (Source: www.bls.gov/news.release/empsit.nro.htm)

“The bottom line is now is not the time to make cuts,” Rosado-Ciriello says. “Children are our future, and we can’t afford to rob them of an education and their future because of politics.”

Rosado-Ciriello continues, “Now is the time when we have to rebuild our economy and rebuild opportunities for people to lift each other up.”

 [Angela Callahan]