The sequester is a job-killer, according to ... Goldman Sachs. Specifically, according to a new study from the bank, continuing sequestration could cost 100,000 federal jobs over the next few quarters. Federal jobs are
not the only ones endangered:
Those employed by companies that rely on government contracts will be hurt as well, as will those whose businesses cater or tend to government workers. Goldman noted in its report that "employment in states with a high ratio of federal spending affected by sequestration to state GDP has grown slightly more slowly than states with less reliance on federal spending." But it cautioned that the correlation between the two is not necessarily strong.
Those effects beyond the direct loss of federal jobs are one reason the Congressional Budget Office's estimate of the job loss from keeping sequestration in place through 2014 is
so much higher, at up to 1.6 million jobs. The CBO estimate considers the overall drag on the economy of not just federal job losses and lost government contracts, but the ripple effect of all the cuts taken together. But even 100,000 government jobs, after the loss of 71,000 federal jobs (according to Goldman) in the past year, is a significant loss, especially when piled on top of already high unemployment.