I have resisted joining the chorus that is criticizing the Romney-Ryan
campaign for their policy flip-flops, inconsistent and insensitive
campaign statements.
But after hearing their reaction to the Bureau of Labor Statistics' (BLS)
August Jobs Report, I couldn't remain silent.
The BLS reported that 96,000 jobs were added. Since August of last year,
nonfarm payroll employment increased by 1.8 million jobs, but this only
amounts to a monthly average of 151,000. Why is this significant? In order
the for the unemployment rate to fall due to people getting hired, monthly
job growth needs to consistently exceed 150,000, the "natural" growth in
the population.
The modest job growth explains why since August of last year the
unemployment rate fell from 9.2 to 8.1 percent. It is not because people
got hired in large numbers. It is because people are staying in school,
seeking training, retiring, filing for disability, or just dropping out.
Whenever there is weak news about the job market (like the BLS Report),
Romney and Ryan "talk down" the economy.
Here is where Romney's labor and workforce policy inconsistencies start.
With Ryan on the ticket, the inconsistencies extend to Congressional
Republicans as well.
First, the Romney-Ryan tax policy will require cuts in human priorities (The United Nation's fancy term for investments in education,training, community centers, parks, libraries, social safety nets, and
income maintenance programs), the very tools that enable people to compete.
Second and the biggest inconsistency given their propensity to "talking
down" the economy are Romney-Ryan and the Congressional Republicans'
probable support to not reauthorize the emergency and extended benefits
portions of the Unemployment Insurance program.
Why would Romney-Ryan curtail an unemployed individual's last major
economic lifeline when they readily admit that robust job growth has not
returned? Why would they curtail the last form of fiscal stimulus?
Not only is their support for curtailing Unemployment Insurance
inconsistent with their "talking down" the economy, it also demonstrates
insensitivity to the immediate challenges that unemployed Americans face,
especially the long-term unemployed.
What evidence supports my claim? First, there is little precedent for
ending the Emergency and Extended Benefit Programs with a national jobless
rate at 8.1%. During the three recent recoveries, Congress began to cut
benefits when the unemployment rate hit 5.8% (December 2003), 6.6%
(February 1994), and 7.2% (March 1985). The employment-population ratio
(share of the population that is working), a better indicator of labor
market health because it captures both job search and labor force
participation, all exceeded 60% when Congress began to curtail and end the
programs. Augusts' employment-population ratio equals 58.3%.
The National Employment Law Project (NELP) that over half a million Extended Benefit recipients have or will lose their assistance. I find a troubling pattern when I linked their estimates to private sector job growth.
NELP estimates that from January to August, over half a million extended
benefit recipients will experience an end to their financial assistance.
From January to May, just over 190,000 of the 410,800 that experienced an
end to their extended benefits live in states with recent employment
growth that is below the national average. From June to August, 14,000 of
the extended benefit recipients that will lose their benefits live in
states where recent employment growth continues to contract.
What are the consequences of Romney-Ryan Policy Inconsistencies?
For the remainder of this year and well into 2013, beneficiaries who see
their support vanish and live in states with weak private sector job
growth will have to re-tap family, friends, and social service nonprofits
to meet their immediate and short-term financial needs. If Congress fails
to reauthorize the federal Emergency Unemployment Compensation (EUC)
program by December, Organizations such as the United Way and the agencies
that they fund will experience a surge in demand for their services.
Maybe this is what Romney-Ryan and the Republicans want for the unemployed
and their communities, but these support mechanisms have yet to replenish
their resources, which largely come from charitable giving.
This raises the potential for a policy flip-flop.
In order for the Romney-Ryan tax policy arithmetic to add up, either middle-class taxes have to rise, or deductions for charitable giving must end or be dramatically reduced.
Further, the 2012 Republican Party Platform explicitly states that charitable giving remain tax deductable.
Yet, another inconsistency and we haven't even had the first Presidential
debate...
About the Author
William M. Rodgers, III is Professor of Public Policy and Chief Economist
at the Heldrich Center for Workforce Development at Rutgers University. He
holds a BA from Dartmouth College, MA's from UC Santa Barbara and Harvard
University, and a Ph.D. from Harvard University. He is an elected member
of the National Academy of Social Insurance, and serves on the Academy's
Board of Directors.
Prior to coming to Rutgers, in 2000, Rodgers served as chief economist at
the U.S. Department of Labor, appointed by Alexis Herman, U.S. Secretary
of Labor. His policy work spans from working on Acting Governor Codey's
pensions benefits review task force to serving as a member of Governor
Corzine's commission on government efficiency and reform. Currently, he
sits on the National Urban League's Council of Economic Advisors, and he
served on President Obama's Department of Labor Transition Team.
Professor Rodgers serves United Way Worldwide in a variety of capacities,
serving on Somerset County's Local Operating Board and on the Board of the
United Way of Northern New Jersey. He is a member of United Way World
Wide's U.S. Board of Trustees.