Posts Tagged ‘unemployment’

Dudes, Where’s Our Jobs?

In Current Events, Economics on May 7, 2011 at 23:37

Excerpt: Republicans efforts to block the Democratic agenda since Obama’s election have severally curtailed job creation, and Democrats are loathe to take the effort far enough to affect the job’s deficit in the United States.

They killed Osama Bin Laden. So where are the jobs? Republicans regained control of the House for the umpteenth time. Where are the jobs? According to The Donald, he forced Obama to release his birth certificate. How many jobs did The Donald create? Arizona and Utah passed bills designating a state gun, but the conservative legislatures in these states could not think of a way to create jobs. However, they did give out tax cuts to corporations while they prayed to God that jobs fall from the sky. Republicans thought of ways to sneak anti-choice legislation through the House, which certainly was a good way to spend their time since at least 20 million Americans are unemployed. Conan O’Brian got his own late night television show recently. At least one person got a job.

So, where are the jobs? Where are the green jobs that were going to appear with the passage of stimulus money? Where are the manufacturing jobs? Where are the new-science jobs? Where are the jobs that businesses are supposed to be producing with their tax cuts? If tax cuts create jobs, as Republican prevaricators say, then we should be rife with jobs opportunities.

Obama and the Democratic Congress spent much of 2009 trying to tackle the out of control health care costs and the health care crisis in the United States. What passed was the Patient Protection and Affordable Care Act of 2009.

In the first three months of that year 2 million jobs were lost while they fought over health care. Was the health care battle of 2009 really worth the political capital? A few of the provisions might help more people get access to health care by barring the pre-existing condition provisions used to keep insurance companies from taking risks on anyone but healthy patients. Could those provisions been passed without the insurance mandates that will do little to control health care and health insurance costs?

Hindsight is 20/20, right? What that saying ignores is that hindsight can give you foresight. We have the hindsight, if we take an honest look, to realize that the Bush tax cuts of 2003 did little to create jobs. Using the math of mainstream liberal, conservative and other economists, the $787 billion dollar stimulus of 2009 was too small to do anything but keep the economy on life support. There is a trillion dollar hole in the GDP, and progressive economist Joseph Stiglitz along with more conservative economist Martin Feldstein agrees that a new stimulus package two to three times as large as the 2009 package is needed to awaken the economy.

Economist Dean Baker, co-director of the Center for Economic and Policy Research in Washington, D.C. also supports a larger stimulus package, “The basic story is that the stimulus was too small, pure and simple. It would have been too small even if the Obama’s administration’s projections for the severity of the recession had proven accurate. However, since the downturn is considerably steeper than they had projected, the inadequacy of the stimulus is even greater.” Although Dean’s predictions of 11 percent unemployment have yet to come true, he clearly understood that the stimulus wouldn’t bring us anywhere near the target of 5% unemployment that is a standard gage of a healthy economy.
According to Robert Pollin & Heidi Garrett-Peltier, there are three areas one must consider when looking at the job creating effects of spending. (http://www.ips-dc.org/reports/071001-jobcreation.pdf )

1. Direct effects—the jobs created by producing the fighter bomber or school;

2. Indirect effects—the jobs associated with industries that supply intermediate goods for building a fighter bomber, school, or any other direct spending target. These would include the steel, glass, tire, and electronic industries for building an airplane; and concrete, glass, and trucking industries for building a school.

3. Induced effects—The expansion of employment that results when people who are paid to build a fighter bomber or school spend the money they have earned on other products in the economy.

In summary, the effects of stimulus spending in jobs to the economy include reducing unemployment and increasing the tax base, increased spending and stimulus to producers of the products needed for a given project, and increased spending by those employed in the projects. Republicans want to eliminate this stimulus and Democrats are unwilling to take a chance that the temporary increase in the deficit from stimulus spending will hurt their chances for reelection.

By the time politicians see the stagnant job growth, it might be too late to save their jobs. Be advised that this is not a grade of President Obama, Republicans, or Democrats, but the federal and state governments together and their unfortunate spending and legislative priorities that have failed to affect the jobs’ crisis.

Job Stimulus Report Card

Infrastructure                        Grade: C-

The American Society of Civil Engineers has graded our infrastructure a D. The areas include roads, bridges, aviation, dams, energy and so forth.   Solid waste received the highest grade at a C+. Several areas receive a D, including schools and transit, both areas vital to our growth and well being.

Some jobs were created, and some projects have done some good. However, it is not nearly enough to stimulate externalities (indirect and induced effects) and boost consumer spending and tax revenues. “About 27,800 jobs will be created for every $1 billion in federal highway construction spending under the stimulus package, said chief Department of Transportation economist Jack Wells. Roughly half of those jobs would be “induced” jobs, those “generated when highway construction workers respend their income on consumer goods and services — like lunch at McDonald’s or going to the movies or buying new clothes,” said Wells.” (link)  One problem with freeway and bridge construction is that these jobs are not sustainable. Once the project is done, the job is gone. Afterwards, at least we are left with better roads and bridges and better water in a few places. (link) It’s a start, and we need more.

One way to guarantee sustainable jobs through infrastructure is to have ongoing maintenance of bridges, dams, and levees such as those that collapse during hurricane Katrina that cost thousands of lives and billions of dollars in damage. Unfortunately, we are a pay later society, and lack of upkeep of our infrastructure costs us jobs and security and more money in the long term.

Transportation                        C

According to the New York Times, over $48 billion of stimulus money is set for transportation projects in the United States. A large portion, $9.3 billion is for rail transportation. That is the pool of money that Governor Walker refused then later tried to accept because he suddenly realized the demand for improvements in the Milwaukee-Chicago rail line and that improvements would save the state money. (link)

The rejection of this money led directly to the closure of a factory in Wisconsin that makes rail cars. Great work Governor Walker, letting your Randian ideology get in the way of job creation. Like many stimulus areas, Republican ideology against government spending has decreased the possible impact of the stimulus. Florida’s Governor Rick Scott as has Ohio Governor John Kasich have also rejected stimulus money for rail projects. So, much of the poor grade on this, like other stimulus areas, can be laid directly at the feet of Republican governors and legislators.

Obama should stick to giving money to states like California and New York, where they need and will gladly accept the funds. The White House should also give the money to only those states that have projects in the works and ask for the funds.

Green Jobs                        D

Too little money was put into green energy and thus too few jobs were created. The death of the Cap and Trade energy bill also diminished the number of green jobs created. In 2009, the President “committed to creating 5 million green jobs as part of his energy platform.” (link) “Two years later, the answer to that second question appears to be no. Obama’s environmental agenda is in tatters. His green jobs plan has done little to make a dent in unemployment, which persists at close to 10 percent. Obama’s signature environmental initiative, cap-and-trade, died in the Senate in July. And, during the first year of Obama’s tenure, China massively outspent the United States on clean-energy technology.” (link)

Short term projects are too small to make a dent in unemployment and the long terms projects were too speculative and have yet to get off the ground. Poor math, poor planning, and exaggerated expectations doomed the 5 million green job promise.

State by state run down on green jobs projects: http://www.greenjobs.net/

Education                        C-

Some of the stimulus money went directly to states for colleges and schools and help save teachers’ jobs, but money spent on high stakes testing and Obama’s Race to the Top is wasted. More money needs to be spent on buildings and books and protecting teachers’ jobs. There is too much focus on competition and not enough focus on sustainably good schools. (link) Furthermore, states are cutting budgets and cutting education funds at an alarming rate and the stimulus money in education, besides being wasted on Race to the Top, won’t make up for the loss in education funds on a state level.

Overall                                    D

Republicans are on a crusade to cut spending in areas that will cost us jobs at a time with over 9% official unemployment and at least 16% real unemployment. “The Labor Department’s statistics don’t include…those who have stopped looking for work. This alternative measure creates a much higher number.” The real unemployment rate includes the long term unemployed who no longer receive benefits and those who have given up and is 16-20%, depending on how it is counted. (link)

As Paul Krugman makes clear, the real problems with the economy are not the deficit, nor inflation, nor the devaluation of the dollar, but the ongoing lack of jobs.

The government takes our money; it would be nice if some of it was used for job creation instead of wars and tax cuts for the rich.

Unemployment applications up

One place work is needed is infrastructure

Tex Shelters