THE BLOG
11/30/2009 10:57 am ET | Updated May 25, 2011

Job Creation Agenda Must Include Low-Skill Workers

At one point during the Great Depression, 40,000 union members marched in the streets of Chicago demanding that the government give them jobs. They also wanted an end to Prohibition, but they managed to tie that to job creation, as well.

So far, there are no angry mobs gathering outside the White House. But across the country there is a growing consensus that President Obama must do something to generate jobs now that one in 10 workers are unemployed.

Obama's job summit Thursday with business leaders and policymakers could help shape the approach he takes, be it tax credits, wage subsidies or even a federal jobs program. But beyond deciding what to do, out political leaders need to answer another critical question: Who should benefit?

The easiest and most politically palatable approach, of course, would be finding jobs for the skilled and mid-level workers benched by the economic downturn. But the White House and Congress would be wise not to ignore the tens of millions of people with no wages and few skills whose lives are being ravaged by the Great Recession.

Spending federal money to create work for low-income people is not some misguided form of welfare. Rather, in a country where 88 million adults lack the basic skills required for 90 percent of jobs in the fastest growing industries, this effort would be key to rebuilding our economy and restoring our competitive edge globally.

Consider the unemployment figures: The 10.2 percent national rate is the highest in more than two decades, but the misery is not shared equally. For those with college degrees, the rate is 4.7 percent, while for those without high school diplomas, it rises to 15.5 percent. For young people, ages 16 to 24, the jobless rate is 19.1 percent. And for young African-American men, the rate is a whopping 34.5 percent.

For these Americans and many others, the recession started long before 2008. There are hundreds of communities, rural and urban alike, where unemployment has been high for decades, where skills and education are low, and where families and children are struggling to find their footing in this economy.

President Obama's first stimulus package has so far failed to provide significant job opportunities for these communities. Whatever form his second attempt at job creation takes, it needs to address their needs. That means skill building and education opportunities for those shut out of the economic mainstream. And it means job training aligned with industries that can eventually offer these workers a career to sustain their families.

Out of necessity, some local governments have already begun innovating in this as they have seen budgets slashed and community needs rise. In San Francisco, for instance, the city is using federal stimulus money, plus other dollars from public agencies and private businesses, to pay wages for as many as 1,000 workers until September 2010. The Jobs Now! program places workers in the nonprofit, public and private sectors, depending on their skill levels.

Likewise, rural Perry County, Tenn., is combating its 25-percent unemployment rate with a 100-percent wage subsidy for low-income workers in private sector jobs. To pay for the program, officials are combining stimulus money, job training funds for welfare recipients and emergency disaster relief money to rebuild from a recent tornado.

Congress could also pursue a job creation tax credit, giving employers a break on taxes for each job they add. This would avoid another massive outlay of cash so soon after the American Recovery and Reinvestment Act. But past experience has shown that some employers claim the credit for jobs they were going to fill anyway. A different approach might be a shorter-week tax credit, which gives a break to employers who shorten the work week and maintain wages for those workers, then hire additional workers for those hours.

Ultimately, we should not be afraid to launch a public jobs initiative. Certainly there will be political resistance given the legacy of big government programs such as WPA in the Great Depression and CETA in the 1970s. But rather than discard the idea outright, let's draw the lessons from those programs to craft an approach for 2010.

When done right, a jobs program can accomplish far more than simply putting people to work. It can rebuild a nation, neighborhood by neighborhood. It can invest in improving schools, strengthening infrastructure and improving the environment to prepare these communities to participate more fully in the economic recovery.