The Bureau of Labor Statistics reports that as of February 2010, the unemployment rate stands at 9.7 percent, and the official jobless rate is 16.7 percent, which also counts those who have stopped looking for work and those who have been forced into part-time work. See Bureau of Labor Statistics
[An extended unemployment bill] "doesn't create new jobs. In fact, if anything, continuing to pay people unemployment compensation is a disincentive for them to seek new work...I'm sure most of them would like work and probably have tried to seek it, but you can't argue that it's a job enhancer. If anything, as I said, it's a disincentive. And the same thing with the COBRA extension and the other extensions here," Senator Jon Kyle, Arizona
Unemployment is the scourge of our nation. It causes death and disease. It eats away at family life. It erodes our sense of confidence and well being. And it's a profound insult to the richest country on Earth.
Yet it takes a minor miracle for the Senate just to extend our paltry unemployment benefits and COBRA health insurance premium subsidies for a month. Workers are waiting for real jobs, but our government no longer has the will to create them.
How can we allow millions to go without work while Wall Street bankers--the ones who caused people to lose their jobs in the first place-- "earn" record bonuses? Why are we putting up with this?
It's not rocket science to create decent and useful jobs, (although it does go beyond the current cranial capacity of the U.S. Senate). It's obvious that we desperately need to repair our infrastructure, increase our energy efficiency, generate more renewable energy, and invest in educating our young. We need millions of new workers to do all this work--right now. Our government has all the money and power (and yes, borrowing capacity) it needs to hire these workers directly or fund contractors and state governments to hire them. Either way, workers would get the jobs, and we would get safer bridges and roads, a greener environment, better schools, and a brighter future all around. So what are we waiting for?
Here's what I've heard:
1. The private sector will create enough jobs, if the government gets out of the way. Possibly, but when? Right now more than 2.7 percent of our entire population has been unemployed for more than 26 weeks -- an all time-record since the government began compiling that data in 1948. No one is predicting that the private sector is about to go on a hiring spree. In fact, many analysts think it'll take more than a decade for the labor market to fully recover. You can't tell the unemployed to wait ten years.
Counting on a private sector market miracle is an exercise in faith-based economics. There simply is no evidence that the private sector can create on its own the colossal number of jobs we need. If we wanted to go down to a real unemployment rate of 5% ("full employment"), we'd have to create about 21.8 million jobs, based on today's unemployment numbers. (See Leo Hindery's excellent accounting.) We'd need over 100,000 new jobs every month just to keep up with population growth. It's not fair to the unemployed to pray for private sector jobs that might never come through.
2. We can't afford it. Funding public sector jobs will explode the deficit and the country will go broke: This argument always makes intuitive sense because most of us think of the federal budget as a giant version of our household budget - we've got to balance the books, right?
I'd suggest we leave that analogy behind. Governments just don't work the same way as families do. We have to look at the hard realities of unemployment, taxes and deficits.
For instance, every unemployed worker is someone who is not paying taxes. If we're not collecting taxes from the unemployed, then we've got to collect more taxes from everyone who is working. Either that, or we have to cut back on services. If we go with option one and raise taxes on middle and low income earners, they'll have less money to spend on goods and services. When demand goes down, businesses contract--meaning layoffs in the private sector. But if we go with option two and cut government services, we'll have to lay off public sector workers. Now we won't be collecting their taxes, and the downward cycle continues. Plus, we don't get the services.
Or, we could spend the money to create the jobs and just let the deficit rise a bit more. The very thought makes politicians and the public weak in the knees. But in fact this would start a virtuous cycle that would eventually reduce the deficit: Our newly reemployed people start paying taxes again. And with their increased income, they start buying more goods and services. This new demand leads to more hiring in the private sector. These freshly hired private sector workers start paying taxes too. The federal budget swells with new revenue, and the deficit drops.
But let's say you just can't stomach letting the deficit rise right now. You think the government is really out of money--or maybe you hate deficits in principle. There's an easy solution to your problem. Place a windfall profits tax on Wall Street bonuses. Impose a steep tax on people collecting $3 million or more. (Another way to do it is to tax the financial transactions involved in speculative investments by Wall Street and the super-rich.)
After all, those fat bonuses are unearned: The entire financial sector is still being bankrolled by the taxpayers, who just doled out $10 trillion (not billion) in loans and guarantees. Besides, taxing the super-rich doesn't put a dent in demand for goods and services the way taxing other people does. The rich can only buy so much. The rest goes into investment, much of it speculative. So a tax on the super rich reduces demand for the very casino type investments that got us into this mess.
3. Private sector jobs are better that public sector jobs.
Why is that? There is a widely shared perception that having a public job is like being on the dole, while having a private sector job is righteous. Maybe people sense that in the private sector you are competing to sell your goods and services in the rough and tumble of the marketplace--and so you must be producing items that buyers want and need. Government jobs are shielded from market forces.
But think about some of our greatest public employment efforts. Was there anything wrong with the government workers at NASA who landed us on the moon? Or with the public sector workers in the Manhattan project charged with winning World War II? Are teachers at public universities somehow less worthy than those in private universities? Let's be honest: a good job is one that contributes to the well-being of society and that provides a fair wage and benefits. During an employment crisis, those jobs might best come directly from federal employment or indirectly through federal contracts and grants to state governments.
This myth also includes the notion that the private sector is more efficient than the public sector. Sometimes it is, but mostly it isn't. Take health care, which accounts for nearly 17 percent of our entire economy. Medicare is a relative model of efficiency, with much lower administrative costs than private health insurers. The average private insurance company worker is far less productive and efficient than an equivalent federal employee working for Medicare. (See study by Himmelstein, Woolhandler and Wolfe)
4. Big government suffocates our freedom. The smaller the central government, the better -- period, the end. This is the hardest argument to refute because it is about ideology not facts. Simply put, many Americans believe that the federal government is bad by definition. Some don't like any government at all. Others think power should reside mostly with state governments. This idea goes all the way back to the anti-federalists led by Thomas Jefferson, who feared that yeomen farmers would be ruled (and feasted upon) by far-away economic elites who controlled the nation's money and wealth.
In modern times this has turned into a fear of a totalitarian state with the power to tell us what to do and even deny us our most basic liberties. A government that creates millions of jobs could be seen as a government that's taking over the economy (like taking over GM). It just gets bigger and more intrusive. And more corrupt and pork-ridden. (There's no denying we've got some federal corruption, but again the private sector is hardly immune to the problem. In fact, it lobbies for the pork each and every day.)
It's probably impossible to convince anyone who hates big government to change their minds. But we need to consider what state governments can and cannot do to create jobs. Basically, their hands are tied precisely because they are not permitted by our federal constitution to run up debt. So when tax revenues plunge (as they still are doing) states have to cut back services and/or increase taxes. In effect, the states act as anti-stimulus programs. They are laying off workers and will continue to do so until either the private sector or the federal government creates many more jobs. Unlike the feds, states are in no position to regulate Wall Street. They're not big enough, not strong enough and can easily be played off against each other.
While many fear big government, I fear high unemployment even more. That's because the Petri dish for real totalitarianism is high unemployment -- not the relatively benign big government we've experienced in America. When people don't have jobs and see no prospect for finding them, they get desperate -- maybe desperate enough to follow leaders who whip up hatred and trample on people's rights in their quest for power. Violent oppression of minority groups often flows from high unemployment. So does war.
No thanks. I'll take a government that puts people to work even if it has to hire 10 million more workers itself. We don't have to sacrifice freedom to put people to work. We just have to muster the will to hire them.
Unfortunately, none of our political leaders have the nerve to declare an employment emergency and get busy creating millions of new jobs. Maybe it's because so many of them got elected with money from the financial industry, and Wall Street doesn't give a damn about jobs. The bankers are happy to continue their taxpayer-financed gambling spree, secure in the knowledge that they are still too big to fail. The Tea Party, instead of focusing its ire on these rapacious bankers, prefers to skewer big government and taxes, giving politicians one more reason to sit on their hands instead of creating jobs now.
Meanwhile, the unemployed are still out in the cold. Maybe the new Coffee Party will provide something more than warm drinks to those without jobs. But you heard it here first: We're going to have big trouble in this country if we don't create jobs for the unemployed in a hurry. They need them. They deserve them. We need to build a movement to demand them.
How about a Jobs Now Party?
Les Leopold is the author of The Looting of America: How Wall Street's Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It Chelsea Green Publishing, June 2009.
Follow Les Leopold on Twitter: www.twitter.com/les_leopold
A Professional Propaganda Technique----- Is when a writer or whoever....... gives a 'moderately accurate' description of the problem....NEVER FULLY because...... they're Propagandists and Professional Disinformers.......they're not students of History...they don't know the facts .. and in most cases they regurgitate information from the Propagandists.
So instead of promoting a 'REAL SOLUTION' to the problem....which they're aware of ...they promote something crazy.... like this story we're reading.......... Notice the pattern? DISTRACT and DIVERT.
Unfortunately this is very easy to do......,because when it comes to the subject of MONEY ..... we Americans know very little about it.
Imagine giving 100,000 visas to foreign physicians. That's half-a-million jobs. And 100,000 new home-owners needing cars, furniture, refrigerators, washing machines, computers etc. What could be a better stimulus to our economy? This stimulus would be achieved without a taxpayer dime.
Plus, high-income earners with mid-income employees contribute tax dollars to the treasury. These jobs are long-term, cannot be exported and provides needed services to Americans. These jobs would be distributed throughout the country in big cities, small towns and rural America. Properly designed, the jobs would be produced about six months after the government issues the work visas / green cards and physicians arrive in the USA.
It would be nice to have US trained-graduates. Yet that will take 10 years for them to enter into the medical field. That's too long wait-time for patients or job-seekers. Recent report claims American doctors are reluctant to serve long-hours in rural areas and inner cities.
So if you think Obama or Leo is on the side of working folks then why aren't they talking about ending these regulations? I really want to know. Because the next auction for American jobs is in April. And where I work we use H-1B to ensure we don't have to hire Americans...even as we lay off the Americans we still have.
And next the want an amnesty for all illegals. Does that make any sense?
If immigration is so great then why not just have open borders as law? Why not?
And NO it’s not that the “private sector job is righteous” it is that the private sector creates wealth government jobs spend wealth this is how it works. I have an idea for a new product I build a factory (employing people) I buy tools (employing people) I hire people to make product (employing people) etc. I have created wealth out of nothing but an idea. Name one government job that has created wealth?
Look at history after 4 years of Wilson’s progressive tax the country was in a recession Coolidge massively cut taxes in 6 months the recession was over. After 8 years of the “New Deal” unemployment was almost the same (kind of what you want). Kennedy and Reagan cut taxes unemployment dropped.
Any business person will tell you this first put “Health Care”, “Cap and Trade” and “Card Check” on a back burner, eliminate capital gains taxes, drop corporate taxes to 12% extend the Bush tax cut for one year talk to someone in business. If you tax them they and jobs will just go someplace else.
BTW, our post WWII trade with the rest of the world was less than 5% of what it is today. Under the Marshall plan, we exported food for free, and we used part of our capital to fund reconstruction in Europe in Asia. Under the Lend Lease Act, the European allies owed us hundreds of millions of dollars for military equipment, and they never paid us back one dime. In gratitude, the allies and the former axis powers rigged "free trade" in their favor. Only President Nixon had the cojones to stop the bleeding when he instituted a 15% surcharge on imports in 1972. This killed imports, and rather than retaliate, the world reasoned with us at the bargaining table.
When President Reagan came along, he opened up world trade to break the unions. Within three years, the US became a debtor nation. As for Reagan prosperity, Senator Moynihan said it best. "We borrowed a trillion dollars and threw a party."
But due to the growth of corporations in the 19th century and other factors, you needed a regulator, governmnent, to protect the people from large financial interests eating the working man alive due to a weak central government not "interfering" with free enterprise. No longer did we live in a world of small farms and small firms.
Something had to grow to match this unchecked power; only until the Depression did we strengthen the national government to compensate and protect the average citizen, regulate the large interests, and help provide relief to those who became victims of forces beyond his/her control. So, to achieve Jefferson's ends, we realized the necessity of adopting Hamiltonian means.
That's what some of the debate in modern society is about. We cannot really return government's role to 1776. It is more absurd than running your business with a typewriter. You cannot re-create the past in a world of changing, modern needs. IT SOUNDS GOOD TO THE LISTENER, BUT IT SOUNDS EVEN BETTER TO THE POLITICIANS WHO USE IT AS A DEBATING POINT AND POLICY, WHO HEAR IT TO THE TUNE OF CAMPAIGN CONTRIBUTIONS, SLUSH FUNDS, PERKS AND PROMISES OF WEALTHY LOBBYIST JOB!
And what do you mean you “cannot really return government's role to 1776” Well why not? The constitution was created to protect the individual from a tyrannical government (the question from above was a trick question the constitution protects us from big government) so what you are trying to tell me is that in a MODERN society a tyrant cannot exist? Look around the world tyranny is alive and well and seems to be doing just fine.
The worker has been paid that money, which the worker then spends on rent, a babysitter, car payment. The government collects taxes on the sales, and then on wages to those other people who receive a portion of the $85.
Its really dangerous to mislead people with deficit arguments. Try paying off the deficit we have now if we have millions of people out of work. It seems like there are some who profit handsomely from a society hungry and bored without work resulting from a huge financial crisis .
Its real important the American people understand the distinction because hogwash about the deficit is a problem. So deficits are good if they pay for wars? The country has gotten itself out of these situations before by spending, as have many countries.
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Well the NY Draft riots during late 19th c. stemmed from this imbalance: high unemployment,a war and racism.It's a dangerous mix.
To answer your question- lack of political will or a long term vision about keeping America afloat and thriving is why we don't create the jobs that are needed. AMerica's economic situation has become a cash cow for a handful that profit from the ongoing chaos, war and instability .There is no monetary incentive for stability and peace.
Then again, we can always move to Australia.
Hindsight = 20/20
The money has to come from somewhere else, whether through the export of goods and services, or through an expansion of the tax base in a way that does not creates more demand for services than the taxes pay in.
As someone else said, there cannot be a unilateral solution. It will require both the public and private sectors, not just one or the other.
I do like, very much so, the windfall tax idea. It would not be a "punishment for success" as taxes for higher brackets are considered to be. As the article notes, these bonuses are being paid without being earned. Just today, I heard a conversation in which it was said: "Only in America can some chump get paid so much for screwing up royally, more than I will get paid in my lifetime for providing a tangible good/service."
THAT is not the American Dream we all signed up for.
I maintain that hiring public sector temp jobs that last 36-48 months at a decent wage would produce consumer demand and push the private sector into hiring. Once people begin working at private sector jobs, consumer demand increases even further and creates more jobs...Infrastructure projects are nice, but really, can you see some 54yo guy out there digging a trench all day long in the 95' heat? We have to start someplace are real soon.
not to mention what it would do for the unemployed's self-esteem, families, marriages, pride, mental health
The costs of unemployment are so high... i always think when i hear about executive pay/bonuses how MANY jobs just one jerk's bonus could create....
UK put strings on their banker's bailouts... ppl will riot at some point if they/AIG are not stopped...they caused the mess then have the nerve to say they deserve ANYthing more than a living wage? they fear losing "talent" ... CALL THEIR BLUFF, let them know what it feels like to be looking for a job in this economy.
It should be abundantly clear that government deficit does not fix anything, it only enriches oligarchic structures and corrupts the political landscape.
More deficit means more corruption, more poverty and less economic development. It's the way to suck the last cents out of the taxpayers.
I also think infrastructure projects are necessary BUT not DEFICIT financed!!! It's not hard:
1. Balance the trade (many ways to do it, have been done before on regular basis),
2. Stop the bailouts, wars, etc useless and expensive undertakings,
3. Tax offshoring
4. Reinstate Glass-Stegall and clear the immense corruption in the financial system.
5. Lean back and enjoy.
I just heard about this book about the financial industry, The Quants, which points to how little we the people through our representatives have any power anymore over the run away financial titans that seem hell-bent in their power daze to ruin the bedrock financial system that gave our country such stability. This is no longer partisan, our economy is in serious trouble, and we the people are looking to our representatives to ensure our country remains viable. Despite the fact that these titans and those baggers who claim government is bad are willing to see everyone else suffer through the next ten years of unemployment if something isn't done, our representatives are paid to ensure some deep changes are made.
Whoopi Goldberg asked a poignant question, and having her off the air for a week doesn't change the righteousness of her question: Who is looking out for the American people?"