Put America Back To Work
Bob Herbert
The biggest domestic policy failure has been the refusal of top officials in the White House and in Congress to recognize the severity of the employment crisis that has settled like a plague over American workers.
There is no longer any excuse for believing that the Great Recession and its aftermath was a more or less typical economic downturn to be followed by a robust recovery. That’s a pipedream. What we are experiencing is an economic disaster, the worst reversal to hit the U.S. since the 1930s. The human suffering is profound. Some 14 million Americans are officially counted as unemployed. Nearly half have been out of work for six months or more, and many have been jobless for a year or two or longer.
Poverty is once again on the march, moving like Patton’s Third Army through communities that had never had more than a tenuous hold on the American dream. The few jobs now being created too often pay a pittance, the minimum wage or just above, not nearly enough to pry open the doors to a middle class standard of living.
Starved of tax revenues, the federal budget is submerged in a vast ocean of red ink. One of the tragic results is that social services are under furious attack at the same time that the need for such services has grown enormously. If dramatic steps are not soon taken to put millions of jobless Americans back to work, the quality of life for much, if not most, of the population will be irreparably damaged. The American dream itself is at risk.
Politicians have given little more than lip service to this terrible turn of events. If there was but one message that I would try to get through to the nation’s leadership, it is that we cannot begin to get the United States back on track until we begin to put our people back to work.
And there is so much work to be done. Start with the crying need to rebuild the nation’s aging, deteriorating infrastructure – its bridges and highways, airports and air traffic control systems, its sewer and wastewater treatment facilities, the electrical grid, inland waterways, public transportation systems, levees and floodwalls and ports and dams, and on and on. Lawrence Summers, until recently President Obama’s top economic adviser, has pointed out that 75 percent of America’s public schools have structural deficiencies. Twelve percent of the nation’s bridges have been rated structurally deficient and another 15 percent are functionally obsolete.
Three to four trillion dollars worth of improvements will be needed over the next decade just to bring the infrastructure into a reasonable state of repair. Meanwhile, we’ve got legions of unemployed construction workers, manufacturing workers, engineers and others who are ready and eager to step into the breach, to take on jobs ranging from infrastructure maintenance and repair to infrastructure design and new construction. It shouldn’t require a genius to put together those two gigantic pieces of America’s economic puzzle – infrastructure and unemployment.
Yes, it would be expensive. But the money spent would be an investment designed to bring about a stronger, more stable economic environment. Putting people to work bolsters the economy and the newly-employed workers begin paying taxes again. Improving the infrastructure would make American industry much more competitive overall, and would spawn new industries. Creation of a national infrastructure bank that would use government funds to leverage additional investments from the private sector to finance projects of national importance would lead to extraordinary longterm benefits.
But even rebuilding the infrastructure is not enough. The employment crisis facing the U.S. is enormous and is taking a particularly harsh toll on the less well-educated members of the society. We need to take our cue from Franklin Roosevelt who understood during the Depression that nothing short of a federal jobs program was essential. The two-pronged goal was to alleviate the suffering of the unemployed and, as the workers began spending their wages, improve the economy.
Roosevelt put millions of Americans to work, including artists, writers, photographers and musicians. It was an unprecedented undertaking, and it worked.
We need a public jobs program in America now. A number of approaches have been offered, including a particularly thoughtful and comprehensive proposal prepared for Demos by Philip Harvey, a professor of law and economics at Rutgers University. The idea is simple: “Create jobs for the unemployed directly and immediately in public employment programs that produce useful goods and services for the public’s benefit.”
As Harvey’s report explains:
“When jobs program participants spend their wages, and program administrators purchase materials and supplies for program projects, the benefits delivered in the first instance to unemployed workers trickle up to the private sector, inducing private sector job creation that supplements the immediate employment effect of the job creation program itself.”
A crucial aspect of the program is that it would begin to fill the demand gap that is hampering the economic recovery. With so many millions of people out of work, the demand for goods and services is diminished. Consumers are tapped out. Private businesses are not hiring workers because the demand is not there for the additional goods and services they would be producing.
Direct job creation would put people to work quickly, without having to wait many long months, or possibly years, for the economy to fully recover. The money from their paychecks would be pumped immediately into the economy.
Like infrastructure spending, a carefully crafted direct jobs plan would be an investment that would be repaid many times over, just as investments in Hoover Dam, rural electrification, the Works Progress Administration and the G.I. Bill delivered enormous longterm benefits to the society.
F.D.R., in his first inaugural address, told a worried nation that “our greatest primary task is to put people to work.” It was a task, he insisted, that should be treated “as we would treat the emergency of a war.”
The question today, in one of our darkest economic hours, is whether we’re smart enough to heed that essential lesson of history.
This post is part of Demos' "America Can Work Better" Week.
Reader Comments (5)
Why do all discussions about the need for jobs always neglect to mention outsourcing as a primary cause for joblessness. When enough jobs get eliminated - of course we're going to have a collapsed economy.Why can't the tax law incentivising outsourcing jobs overseas be replaced with a tax incentive for bringing those jobs back?
So what are you saying, Bob? Don't return the jobs to the USA for the reasons you cited?
The typical American has no knowledge about how he can affect the trade deficit directly with what they purchase and where. And no I do not share your gloom, that things have to get that expensive if American jobs stage a resurgence.
The country has corroded from within in my lifetime of 50+ years. There is no unity in the United States just self interest. There is no national good, only me first type mentality. I really am having trouble seeing an issue that can unite Americans, hell even 09/11 has become divisive with things. I do not hold a lot of hope that things will get much better until we reognize that we do things better together than separately.
It's good to hear Bob Herbert's voice on this . I agree with the proposal----rather than timid and indirect measures like tax holidays, or private employer incentives, we need a jobs program and direct hiring. There are thousands of infrastructure upgrades needed and people want to be self-sufficient by doing something useful and earning a decent wage. I recently received a Rasmussen poll robocall, and among the delusional scenarios I was asked to rate were "the Federal government hiring one million unemployed people," "the Federal government providing a subsistence stipend to all Americans, even if they don't work," and "agree or disagree: " the federal government is a special interest group." It's in our country's interest to get people back to work, and to modernize/repair our infrastructure. Many Americans imagine Western Europe looking like a post-war ruin, when in fact it's got 21st century amenities that we lack! (and universal health care).
This might have been a great idea before we had $14T in debt. Now, however, we have to pay interest on that debt. Interest rates are being held very low, to the great detriment of savers and investors, but the Fed ultimately can't control that. At some point, the 11% inflation we are experiencing is factored into interest rates on US bonds. The 3% interest rate, which produces a load on the treasury of 6% of the budget in which we borrow an additional $1.5T, will morph into 20% rates and 50% of a budget in which the gov can't borrow at all.
Simple proposals would work if the economy was some simple mechanism. Most people seem to have some hydraulic model in their heads : push more money/blood through the system, it will be healthier.
The fact is that the economy is an extremely complex system, not a simple mechanism. More of a rainforest eco-sysem than even an diesel-electric train engine, which is about the most complex item that one would call a 'mechanism'.
How do you make a better rain forest? There are a few things I have read about to help a rainforest to recover, but mostly it is 'stop screwing it up' and merely allow it to recover. To do better than that, you have to know very great deal about the system. We know a lot more about a rainforest ecosystem than we do about the economy.
Easy to screw one up, however, merely try to help in a system you don't understand. That is a characteristic of all complex systems.
The very, very many laws and regulations by which the gov has 'tried to help' is how we got here : a world-wide economic depression, huge unemployment and governments everywhere about to default on their sovereign debt, with the resulting bank failures and economic chaos with the resulting political and social chaos. The longer the various govs succeed in staving off this disaster, the more of our tax money they give to the already-rich and the worse the problem is for the rest of us.
When the hole is getting deeper, stop digging.
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NewsBusters| PBS's Tavis Smiley and Guest: Republicans Don't Want to Help Jobless
http://newsbusters.org/blogs/tim-graham/2011/09/09/pbss-tavis-smiley-and-guest-republicans-dont-want-help-jobless