WASHINGTON — For the federal government, the prospect of cutting spending is creating a political crisis and warnings of catastrophe. For the private sector, it’s “been there, done that."
There could be a lesson for government in how the private sector has bounced back from the 2008 financial crisis and the Great Recession. It wasn’t without pain. But companies big and small alike have had to “downsize," “right-size" and often simply close up shop. Many of those that survived found ways to do more with fewer workers.
“We laid off 7 million. ... We know them all and their families," said Bill Dunkelberg, chief economist of the National Federation of Independent Business, which represents smaller retailers and restaurants.
Lacking a political deal for an alternative, many government agencies now are preparing to do what some private-sector companies have already done. They’ll furlough workers, perhaps one day a month or perhaps more.
The Pentagon, for example, plans unpaid furloughs one day a week starting next month for 800,000 civilian employees, perhaps through the end of the government’s fiscal year on Sept. 30.
These sorts of unpleasant cost-cutting measures are exactly what privately held businesses were forced to do in the aftermath of the financial crisis.So if the private sector could tighten the belt and reinvent itself, can the government? It’s a fair question, but an admittedly faulty one. Business operates to make a profit for its owners or its shareholders, while government exists to protect and serve its citizens.
“I used to be one of those who used to say, ‘Why can’t government be more like business?’" said Debra Perry, mayor of Milton, Wash., a town of about 7,000. “And now that I’m in government, there is still part of me that says government can be more like business. Because, in your everyday business, there are certain things that are non-negotiable or you are not going to be in business, and those are the things you do."