An American Jobs Plan

The Economic Policy Institute in the US have released a five point American Jobs Plan which, hopefully, will be a major focus of discussion at the soon to be convened Presidential Jobs Summit.

http://www.epi.org/index.php/american_jobs/american_jobs_plan

Speaking to a joint CLC/CCPA meeting a couple of weeks ago, EPI President Larry Mishel – who has been invited to the Summit – said that the Obama Administration is very likely to introduce a second major stimulus package, notwithstanding concerns on the right side of the spectrum that the current deficit is already too large. As this Plan argues, the economic costs of inaction would far outweigh the costs of adding to the deficit at a time when unemployment is already over 10% and set to fall only very gradually even if a tepid recovery begins, which is itself far from certain.  Deficit worriers can note that the EPI plan does finance part of it its proposed spending package through a Financial Transactions Tax to be introduced in three years.

The major elements of the EPI plan are extended EI benefits and continuation of health benefits; relief to state and local governments to stabilize public sector employment; investment in infrastructure with a focus on school modernization; and direct job creation in the public sector. They also propose a job creation tax credit for private sector employers.

The plan proposes to spend an additional $400 Billion in year one, which would create an estimated 4.6 to 6.0 million jobs and  boost GDP by about 3%.

All of which is well worth reading as we in Canada begin discussions of how to add to stimulus measures in the next round of federal and provincial budgets.

3 comments

  • Here’s a response to the EPI/AFL-CIO plan I read on the “Common Dreams” website.

    Timid, tepid, essentially bereft of imagination and political courage. Michael Moore does a better job of arguing for the urgent need for more jobs and has better ideas about what to do to get them.

    Why this AFL-CIO plan-less “plan” will fail:

    –No mention of re-negotiating the “free trade” regime to include enforceable labor and environmental regulations on a global basis.

    –No mention of all the idle manufacturing capacity that could be used to build a new green economy, mass transportation systems, high speed bullet trains, hybrid & electric vehicles, a modernized electrical grid, solar photo-voltaic cells and solar arrays, high-tech wind turbines and other green, sustainable products.

    –No mention of effective, comprehensive FDR-style government work programs like the Civilian Conservation Corps, WPA, etc., that provided jobs for adults from 18 to 55 years of age in everything from physical infrastructure building, soil and forest conservation, monument construction, trail building, photography, writing, painting, map making, you name it.

    This half-assed, doomed to fail AFL-CIO nonsense is all about cuddling up to the Democratic Leadership Council hacks in the Democratic Party and begging a seat sans power or influence at any bogus official Team Obama “jobs summits.” Obama has already declared that only the private sector can be relied upon to do significant job creation. He is not an authentic liberal or progressive and by bowing and scraping before him the same way the AFL-CIO did before Clinton when he sold them down the river with NAFTA and WTO, the AFL-CIO is guaranteeing the same failed result and more grand betrayals of American workers, the underemployed and unemployed.

  • And here’s Dean Baker’s press release:

    Statement on President Obama’s Job Summit

    http://www.cepr.net/index.php/press-releases/press-releases/job-summit/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+cepr+(CEPR)

    For Immediate Release: December 2, 2009
    Contact: Alan Barber, (202) 293-5380 x 115

    Washington, D.C.- Center for Economic and Policy Research Co-Director Dean Baker issued the following statement on President Obama’s upcoming jobs summit:

    It is encouraging to see the Obama administration return its focus to job creation. The stimulus bill passed last February was an important factor in stopping the steepest economic downturn since the Great Depression. The latest report from the Congressional Budget Office indicates that the ARRA of 2009 may have been responsible for creating as many as 1.6 million jobs, lowering the unemployment rate by as much as a full percentage point.

    Nonetheless, the downturn has been markedly worse than was predicted last winter. The unemployment rate is at an unacceptably high level and is now projected to remain high long into the future, remaining in double digits for most of 2010, and not falling below 7.0 percent until late 2012. President Obama has rightly decided that this baseline is unacceptable.

    There are four steps that can be taken to reduce the unemployment rate quickly:

    1. Flexible employment credits to allow employers to shorten work hours instead of laying off workers: Each month, employers are laying off close to 2 million workers. If the government gave employers tax credits to shorten work time while leaving pay unchanged, it could reduce these layoffs. If the number of layoffs fell by just 10 percent, this would have the same effect on employment as adding 200,000 jobs a month or 2.5 million a year. Germany has used this mechanism to keep its unemployment rate from rising, even though it has experienced a steeper recession than the United States.

    2. Support for education, health care and other vital state and local government services: Under budget pressure, state and local governments across the country are cutting these services and laying off workers. Aid from the federal government can allow these workers to keep their jobs and services to continue to be provided.

    3. Direct job creation: There are parts of the country where the unemployment rate now exceeds 25 percent, with youth unemployment well above 40 percent. To prevent a generation of young people from being locked out of the job market, it is important to have public service jobs that can employ people immediately.

    4. Right to rent for homeowners facing foreclosure: If homeowners facing foreclosure had the right to remain in their homes as tenants paying the market rent for a substantial period (5-10 years), it would provide substantial housing security to millions of families while stemming the nation’s rising number of foreclosures. This policy could also provide an economic boost since it would free up money for millions of homeowners who are now struggling with mortgage debts that they cannot pay. This would in turn lead to a boost in consumption that would increase demand in the economy.

    These steps would go far in reducing layoffs, fostering job growth and giving relief to the millions of Americans suffering as a result of the economic crisis.

  • Every Job the US creates now will be from speculative bubbles that are being formed. Just like all the Jobs that were directly or indirectly created by 300$ billion deficit, and 1% interest rates set by Bush/Greenspan to fight deflation from NASDAQ pop in 89-01 with bailing out long term capital management that created too big too fail Banks & a housing boom or S&P bubble.

    So now rates wont be incrementally raised from 0-1% to about 6% like before because the money in circulation decreases as the higher rates increasingly takes from the disposable income erasing jobs just like the housing jobs that disappeared when rates inched up.

    Americas central bank will never raise rates again in fear of derailing jobs, stocks, equities, commodities. A combination of factors will cement the weaker dollar. The FED likes the weaker dollar has bailed out institutions prosper from proprietary trading in carry trades to race back and repay the Fed.

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