Sequestration could cost Michigan 23,000 to 25,000 jobs

Feb 20, 2013

Michigan stands to lose thousands of jobs if automatic federal budget cuts take effect at the end of the month.

The effects could ripple through the state’s economy.

Stephen Fuller, an economist at George Mason University, has broken down the effects of the $85 billion in federal spending cuts that will go into effect if the so-called sequestration goes through next week.

He estimates Michigan will lose 23,000 to 25,000 jobs, mostly defense department related, but also about 10,000 non-governmental jobs.

That’s slightly lower than the more than 30,000 jobs lost he predicted last year, but he says the effect on Michigan’s economy will still be more than $2 billion.

Fuller says small businesses will feel the effect more than large businesses.

“They have a harder time adjusting…they don’t have stockholders or large deposits in the bank to live off of,” said Fuller.

Fuller says government workers will probably start to feel the budget cuts in April, but a Lansing area defense contractor has already announced layoffs tied to the looming sequestration.