PA Jobs on the Line in Ryan Budget

Publication Date: 
April 20, 2012

Contact:
Mark Price, KRC Labor Economist
717-255-7158 or 717-440-2360

 
Rep. Paul Ryan
Rep. Paul Ryan of Wisconsin

Pennsylvania would lose hundreds of thousands of jobs over the next five years if Congress enacts the deep federal cuts to Medicaid proposed by Wisconsin Representative Paul Ryan. The Medicaid cuts in his budget plan would cost nearly 5 million jobs nationally.

Ryan’s fiscal 2013 budget, which passed the House on March 29, would make $3.3 trillion in cuts to health and other service for children and working-age adults over the next decade. The cuts would largely impact seniors, people with disabilities and low-income children and families, while trimming employment at a time when the jobless rate is expected to remain abnormally high.[1]

Analyzing just the $544 billion in Medicaid cuts proposed in the Ryan budget over the next five years, the Economic Policy Institute found that Pennsylvania would lose 37,200 jobs in 2014 with the loss climbing each year and peaking in 2017 at 63,600 jobs. Overall, the commonwealth would lose 214,527 jobs between 2013 and 2017.

Because the bulk of the cuts will slow spending on goods and services, such as food, nursing home care and health services, 96% of the five-year job loss under the Ryan Budget would be in the private sector.

Medicaid cuts in Ryan budget[1] ($ billions) and job loss[2], 2013–2017
United States 2013 2014 2015 2016 2017 2013-2017
Total -10,557 -861,553 -1,220,599 -1,410,242 -1,474,737 -4,977,690
Private Sector -10,098 -823,205 -1,172,795 -1,353,832 -1,419,149 -4,779,080
Pennsylvania 2013 2014 2015 2016 2017 2013-2017
Total[3] -442 -37,249 -52,511 -60,708 -63,617 -214,527
Private Sector[4] -423 -35,591 -50,454 -58,280 -61,219 -205,967
[1] Cuts from Affordable Care Act repeal and block granting
[2] Both national job loss estimates and Pennsylvania job loss estimates were calculated using a fiscal multiplier of 1.4
[3] Total job loss for Pennsylvania is an average of job loss under two scenarios. The first scenario assumes a dollar cut federal spending in Pennsylvania directly translates into a loss of demand for goods and services produced exclusively in Pennsylvania and nowhere else in the country. The second scenario assumes that job loss is proportional to Pennsylvania’s share of national employment. The actual employment impact will lie somewhere between these two estimates and the data presented above is an average of both scenarios.
[4] Assumes private-sector job loss in Pennsylvania will be in the same proportion to total job loss as the nation.
Source. Keystone Research Center based on analysis by Ethan Pollack of the Economic Policy Institute, available online at http://goo.gl/TH8wp

Cuts proposed in the Ryan budget include:

  • Cuts of $1.742 trillion from Medicaid;
  • Cuts of $134 billion from Supplemental Nutrition Assistance Program (formerly food stamps);
  • Cuts of nearly $650 billion from other health programs;
  • Cuts of just over $463 billion from other safety net programs;
  • Cuts of $291 billion from low-income discretionary programs over the next decade.

Footnote

[1] Ethan Pollack, Medicaid Cuts in Ryan Budget Would Cost Jobs In Every State, Economic Policy Institute, Issue Brief #328, April 2012. Available online at http://goo.gl/TH8wp