Most ideas for creating more jobs assume jobs will return when the economy recovers. So the immediate goal is to accelerate the process. A second stimulus would be helpful, especially directed at state governments that are now mounting an anti-stimulus package (tax increases, job cuts, service cuts) of over $200 billion this year and next. If the deficit hawks threaten to take flight, the administration should use the remaining TARP funds.
Other less expensive ideas include a new jobs tax credit for any firm creating net new jobs. Lending directed at small businesses, which are having a hard time getting credit but are responsible for most new jobs. A one-year payroll tax holiday on the first, say, $20,000 of income - which would quickly put money into peoples' pockets and simultaneously make it cheaper for businesses to hire because they pay half the payroll tax. And a WPA style program that hires jobless workers directly to, say, insulate homes.
Most of this would be helpful. Together, they might take the official unemployment rate down a notch or two.
But here's the real worry. The basic assumption that jobs will eventually return when the economy recovers is probably wrong. Some jobs will come back, of course. But the reality that no one wants to talk about is a structural change in the economy that's been going on for years but which the Great Recession has dramatically accelerated.
Under the pressure of this awful recession, many companies have found ways to cut their payrolls for good. They've discovered that new software and computer technologies have made workers in Asia and Latin America just about as productive as Americans, and that the Internet allows far more work to be efficiently outsourced abroad.
This means many Americans won't be rehired unless they're willing to settle for much lower wages and benefits. Today's official unemployment numbers hide the extent to which Americans are already on this path. Among those with jobs, a large and growing number have had to accept lower pay as a condition for keeping them. Or they've lost higher-paying jobs and are now in a new ones that pays less.
Yet reducing unemployment by cutting wages merely exchanges one problem for another. We'll get jobs back but have more people working for pay they consider inadequate, more working families at or near poverty, and widening inequality. The nation will also have a harder time restarting the economy because so many more Americans lack the money they need to buy all the goods and services the economy can produce.
So let's be clear: The goal isn't just more jobs. It's more jobs with good wages. Which means the fix isn't just temporary measures to accelerate a jobs recovery, but permanent new investments in the productivity of Americans.
What sort of investments? Big ones that span many years: early childhood education for every young child, excellent K-12, fully-funded public higher education, more generous aid for kids from middle-class and poor families to attend college, good health care, more basic R&D that's done here in the U.S., better and more efficient public transit like light rail, a power grid that's up to the task, and so on.
Without these sorts of productivity-enhancing investments, a steadily increasing number of Americans will be priced out of competition in world economy. More and more Americans will face a Hobson's choice of no job or a job with lousy wages. It's already happening.
Cross-posted from Robert Reich's Blog
Degreed Engineers/PhD's? India already has us beat and then some.
High-speed rail? Where's the back of the line?
"Green" economy? Can't even get crippled Cap 'n Trade thru Senate.
When will featured bloggers here notice the elephant in a shrinking room - OUR BROKEN TRADE POLICY..
Why is this TRADE Act languishing in Committee?
http://citizen.typepad.com/eyesontrade/2009/06/trade-act-2009-its-here.html
"Big ones that span many years: early childhood education for every young child, excellent K-12, fully-funded public higher education, more generous aid for kids from middle-class and poor families to attend college, good health care, more basic R&D that's done here in the U.S., better and more efficient public transit like light rail, a power grid that's up to the task, and so on."
Hmm. For a former Labor Secretary, this list is rather shallow. The "solutions" sound okay on their surface, but they will take decades to have any meaningful effect. They will basically result in a better educated population and improved infrastructure -- both good things, but how are they going to make a meaningful difference in our competition with the likes of China & India? At the heart of our economical problems is a cultural shortcoming with a political wrapper. Until we have a work force that WANTS to work & achieve accompanied by a set of regulations & laws supporting that desire, we'll be stagnant at best.
The Presidency and politics in general is literally a red herring - a distraction.
Pay no attention to the profit motive behind the screen, little girl.
Only "managed" reforms will be tolerated.
That is the economic reality.
1) Tariffs on all imported goods, which can be produced in the United States, high enough that they would be more expensive that goods produced in the United States.
2) The first point includes parts as well as completed goods.
3) The first point includes goods produced overseas by American Companies too.
4) Payroll taxes paid by employers on foreign workers that make the wages higher than American wages, with the taxes going to the programs that support American workers.
5) Card Check.
6) Outlawing all Carbon Dioxide releasing new vehicles, new heating or cooking systems and energy production after January 1, 2012, with existing vehicles and heating or cooking systems grandfathered in for individuals and small businesses. Having government subsidizing to encourage individuals and small business to upgrade to non carbon dioxide releasing vehicles or systems for heating cooking.
7) A major federal project to build a national system of high speed rail on the level of our interstate system.
8) A major federal project to build convenient and comprehensive public transit in all cities.
9) Repeal the Reagan tax cuts.
10) Restore Glass-Steagall
Ultimately, the economy depends not on what the government does or does not do but how business behaves. When business leaders think that economy is principally about making profit, they will compartmentalize to drive everything to that end. But economy is envirnoment. Everyone of us draws our sustenance from it. Our business and political leaders need to understand that there is more importance in economy than just profit.
Those who do not know history are doomed to repeat it.
There are a number of jobs available in the tech field, and sixteen times that number lining up to apply for those jobs. Our local soup kitchens have seen a 30% increase in requests for help since last year alone.
For the first time in my nearly 50 years in this house, my property taxes went DOWN, and I got a break as in our state we pay property taxes but no state tax on everyday purchases other than a meals tax. Most of my city found their houses down-valued instead of the other way it has been nearly every year.
I don't see much in the way of help coming at any point in the next few years, and when it comes, you can bet you last dollar those on top will still be getting more and those on the bottom will be lucky just to get a sliver more, period.
I just don't get it: tens of thousands of people are still being foreclosed, while the big banks are back at the derivative game with TARP money- and awarding themselves big chunks in the form of "bonuses".
I thought money was given by the Federal Reserve to restart lending and to make conditions easier for those in hardship.
This is a horrible story, one that might compromise the Obama administration present plans and standing in hisotry.
There has been a radical restructuring of our economy whereby semi-skilled blue collar workers and even some highly skilled white collar workers (IT specialists, programmers etc) are no longer needed because there are literally billions of individuals in the BRIC nations who can perform the labor at a fraction of the costs that it would take to employ American workers
What troubles me is that the Obama administration does not seem to realize the severity of the situation
It was most disheartening to hear Obama's opening statements regarding "not having unlimited resources for jobs creation.".....
To me this signals an unwillingness to expend funds for a truly significant jobs creation/training program
This unemployment problem, if left unabated, will lead to political upheaval because swing states such as Indiana, Ohio, PA, and also in traditionally Democratic states such as Michigan, MN, CA, WV, WA, NY, NJ, Delaware are beginning to buckle under economic pressures
There is a growing popular narrative which states that main street has been abandoned the Democratic party. This narrative is further reinforced by the bailouts of Wall Street and by the administration's lip service and its overt apathy towards jobs creation legislation
As frustration rises...these individuals/states will become increasingly susceptible to the simplistic answers, wedge issues and "know nothing" politics that is propagated by the ultra right, the religious right, and the Palins, Limbaughs and Becks......