Those of you who follow this blog know that I’ve been disappointed with what the White House and Congress have thus far done to address the jobs crisis. I’ve recently vented on the Poverty in America blog as well. And, of course, I’m hardly a voice crying in the wilderness.
The jobs problem hasn’t been altogether ignored. The Senate managed to pass a watered-down tax credit for new hires and a stop-gap extension of expanded unemployment benefits and COBRA subsidies.
It then approved extensions of both to the end of the year, along with an extension of the higher federal match for state Medicaid programs–these as part of a large package consisting mostly of tax cut extensions. The House leadership is now deciding what to do with this bill.
By now, it’s fairly common knowledge that public benefits like UI indirectly save or create jobs because recipients use them to purchase essential goods and services. Demand drives hiring–not only at the retail level, but up the supply chain and out to firms that provide contract services.
But the unemployment problem is far larger than the investments to date. In February, 14.9 million jobless people were actively looking for work–100,000 more than in January. But the number of underemployed workers, i.e., those who were working part-time though they wanted full-time jobs, increased by nearly half a million. An additional 1.2 million had given up looking.
Adding the number of payroll jobs eliminated since the beginning of the recession to the number that would be needed to keep pace with population growth, the Economic Policy Institute estimates that about 11.1 million new jobs would be needed to bring the unemployment rate down to its pre-recession level.
Meanwhile, as the Center on Budget and Policy Priorities reports, state governments are proceeding to slash spending. Education, health care and a wide range of other public programs and services have been targeted for cuts. More freezes and reductions in state-level workforces are in the offing.
Some of the cuts–K-12 education, for example–are actually cost-shifting to local governments, which have already laid off teachers, firefighters, public safety officers and other critical workers. They have also deferred or canceled capital projects, thus precipitating more private-sector job losses.
The National League of Cities projects job losses at 1.5 million or more by the end of 2011–unless the federal government steps in to stabilize city budgets.
And now, at last, it may. Congressman George Miller (D-CA) has introduced a bill–the Local Jobs for America Act (H.R. 4812)–that addresses job creation directly and aggressively, with a focus on restoring, retaining and perhaps expanding public services.
The bill would channel:
- $75 billion to local communities–$52.5 billion directly to communities with at least 500,000 residents and the remainder to states to distribute to smaller communities
- $23 billion to states, most of it for earmarked for distribution to local school districts and public higher education institutions
- $1.68 billion for law enforcement and firefighter jobs
- $500,000 to Workforce Investment Act programs for additional on-the-job training slots in private-sector businesses
Most of these provisions were part of the jobs bill the House passed in December, though the proposed WIA funding is somewhat lower. The local community aid would be new.
Funding under the new provisions would be allocated according to a formula that targets funds to communities with above-average poverty and unemployment rates.
Up to half the funds could be used to preserve local government public service positions that would otherwise be eliminated and up to half could go to nonprofits that provide services not customarily provided by local government employees. Any funds left over would go to creating new local government public service jobs.
Funds could be used only for compensation of employees in full-time, full-year positions. And priority for new hires is to be given to laid-off city workers, veterans and workers who are receiving unemployment benefits, have been unemployed so long as to have exhausted their benefits and/or aren’t eligible for benefits because their earnings were below the required minimum.
The price tag on the total package is about $100 billion over the next two years. Miller estimates it would save or create a million jobs. EPI says the actual number could be higher because people with these jobs would be spending money at local businesses.
EPI is very high on the bill. Needless to say, the National League of Cities is too. Also, needless to say, the bill has no Republican cosponsors.
A spokesperson for House Minority Leader John Boehner (R-OH) previews where the Republican delegation will be coming from: “The American people don’t want more wasteful Washington spending that expands government at the expense of small businesses. They want Congress to focus on long-term economic growth by helping small businesses create jobs.”
Last time I checked, Americans were a whole lot more concerned about jobs than the economic engine that would create them. But the Miller bill will face tough sledding anyway.