Sequestration threatens North Alabama economy - WAFF-TV: News, Weather and Sports for Huntsville, AL

Sequestration threatens North Alabama economy

HUNTSVILLE, AL (WAFF) -

As the threat of sequestration looms, people across North Alabama are bracing for impact. But it's not just those in the military, or who work for the military, who could see their jobs in danger.

No one knows exactly what will happen, but even among the uncertainty, economists are saying sequestration will affect every person in the Tennessee Valley in one way or the other.

As it is, Huntsville is slated to feel the effects of sequestration more than many other cities because of the military and defense industries. Even those without ties to Redstone Arsenal will still feel the effects.

Economist John Virkler says every employee at Redstone Arsenal directly or indirectly supports eight other people in the Tennessee Valley.

It all comes down to a domino effect with spending. Those who lose their jobs or take pay cuts because of sequestration will have less money to spend, which means area businesses will lose profits and may be forced to let go of employees. It starts a cycle that impacts the local economy and virtually every person who lives here.

"We are all affected by other people," explained Virkler. "An example I give is with the grocery store. If the people who lost their jobs buy less groceries, everyone who works in the grocery store is affected. Maybe one or two employees may lose their jobs, or they may start working part-time instead of full-time."

Virkler said some of the effects will happen gradually and may not be as obvious in some cases, but they will be there.

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