As former Deputy Treasury Secretary Roger Altman observed in testimony prepared for a Joint Economic Committee (JEC) hearing today, with the loss of 8.4 million jobs since the Great Recession began in December 2007, an "entire decade of job creation has been lost." Digging out from this recession is going to take years, but fortunately the digging has begun.
Congress started the digging last year when we passed the American Recovery and Reinvestment Act to spur demand, create jobs and get capital to small businesses.
While the Recovery Act has been maligned by some critics on the right, Congressional Budget Office (CBO) Director Douglas Elmendorf, as well as mainstream economists, are in agreement that the legislation helped return the economy to growth in the third quarter of 2009 (click here to watch video). In the fourth quarter of 2009, the economy grew 5.9 percent.
But almost 15 million Americans, including 869,000 in my state of New York, remain unemployed. Another 8.3 million are working part-time, but would like to work full-time.
So what should Congress do in such a fragile economy?
We need to identify targeted actions Congress can take to spark an immediate increase in jobs.
The $15 billion job creation legislation passed by the U.S. Senate this week is a good first step. Its core provision, a temporary tax break for businesses that hire workers who have been unemployed for at least 60 days, is a scaled down version of an employer tax credit I had introduced in the House. But more actions are needed.
The JEC has asked economic experts for the most cost effective strategies we can use to create private sector jobs. I've reached out to the CEOs of Fortune 100 companies and leading small businesses to get their best ideas on job creation. And this week, the JEC held hearings with economists, forecasters and corporate executives, including Douglas Elmendorf, CBO Director; Richard Berner, Chief U.S. Economist at Morgan Stanley; and Jeffrey Joerres, Chairman and CEO of Manpower Inc.
CBO Director Elmendorf told the JEC that an employer tax credit of the kind I have introduced, which enables businesses to deduct up to 20 percent of payroll costs when adding a new employee, can have a powerful positive effect on hiring and the economy.
Another proposal, laid out by Richard Berner, is to address the skills shortage in our economy by creating a Job Training Corps that would put to work unemployed teachers and recent college graduates to help build core skills for other unemployed workers (click here to watch). Such an effort would both develop new skills and reduce unemployment and I plan to examine this proposal closely.
Both Berner and Manpower CEO Joerres explained in the hearing that they are seeing some encouraging signs right now. Joerres noted that activity at the 700-800 Manpower offices across the country is growing at levels they haven't seen since 1993 (click here to watch). Berner reported that in a survey of their analysts, corporate hiring plans have returned to pre-recession levels, though companies are not yet acting on those plans.
So there are bright spots, but not enough. We need to move from hiring plans into actual hiring. I'm going to continue to seek ideas and input from experts across sector to ensure that we uncover additional innovative proposals for job creation. But the immediate next step is to get the President a jobs bill that includes strong incentives for businesses to hire so that we can start adding jobs again - right now.
Congresswoman Carolyn B. Maloney represents parts of Queens and Manhattan in the U.S. House of Representatives where she is the Chair of the Joint Economic Committee.