As private pay plummets, public pay in Ohio increases

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A plunge in spending by state and local governments will slow the growth rate of the economy, but is unlikely to stop it in this instance, said Tom Traynor, professor and chairman of Wright State University’s economics department.

This is because the positive potential effect contracting government — making Ohio more competitive for business — won’t be immediately realized, but the reduced earnings of public employees will. Many states are facing the same dilemma, he said.

“Based on the rough information available, the growth rate of the state economy appears to be similar to that of the national economy,” Traynor wrote in an e-mail. “If so, the balancing of the state budget will reduce the economic growth rate, but won’t make it become negative.”

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