The effects of local fiscal contraction on public employment and the advancement of minorities

by Anthony H. Pascal

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California's Proposition 13 is one dramatic example of the fiscal constraints which threaten revenue base of governments, with long-term consequences for employment patterns and opportunities for minorities. Hypothesizes that decisionmakers have implicit objectives in mind for alternative budget strategies based on efficiency, equity, feasibility and implementability. Various causes of local government fiscal contraction are explored, showing a peak in revenues and spending in the mid-1970s and lower growth rate of public employees and earnings since. Los Angeles exemplifies significant losses particularly for low-skilled minority workers since passage of Proposition 13 in 1978. Predicts harsh results for minority employment elsewhere should Proposition 13 fever spread. As job prospects worsen in the public sector, minority workers suffer disproportionately, in jobs lost and slower advancement toward middle class status. Realistically, jobs as well as services, are an output of local government. In cutting back, costs of foregone opportunities should not be overlooked.

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