I have to start by saying that I am not very optimistic about the speech the president is going to give next week – apparently whenever the minority party allows him to. We have taken very minor steps to deal with the most serious economic crisis this country has faced since the 1930s, but yet the dominant political rhetoric seems to be that we did too much and that is why things are bad. Too much? Really? The relatively small so-called stimulus bill of 2009 cost less than $800 billion. About half of that went to tax cuts. Considering the scope of the problem and the size of our economy, it was a small stimulus. The best use of the money was in grants to states to fill their budget gaps and the safety net extensions, such as the Emergency Unemployment Compensation (EUC) program. Those latter things, however, are not stimulus.
The country has endured a jobs depression for three years now and the government has done nothing significant to deal with this. Republicans continue to say rich people need tax cuts and there should be more deregulation. Democrats continue to say we can’t upset the Republicans. But, if tax cuts and deregulation created jobs, there would be more jobs today per capita than any time in the postwar period. But, Republican solutions, supported by the neo-liberal wing of the Democratic Party, have done nothing but redistribute wealth upwards. We need jobs and government must do what it can do to create them. This means providing incentives for corporations to hire rather than hoard profits and reward executives. It means using the role of government as an employer to hire people. But, what we hear is that the president is going to propose scaling up a small-impact program from Georgia that isn’t even designed to create jobs.
The program, Georgia Works, is essentially a program to allow unemployment insurance (UI) claimants to work so that they can keep their skills fresh and learn new skills essential for their careers. According to the state of Georgia, over a quarter of these folks end up employed by their host employer. That’s not unimpressive, but the fact remains that only a small portion of UI claimants are in this program, most participants do not get employed, and there is no tracking to see if the ones employed remain employed for any length of time. Job training ideas are fine, but they will not create jobs. The skills gap is not the most pressing problem right now; the jobs gap is. While Georgia Works is an interesting program, I think it will be met unenthusiastically – and for good reasons. It will help almost no people. More people are currently unemployed that reside in the state of Illinois.
So, there are any number of ways that the president could go big and bold in this speech. Below, I have set out an agenda of programs that collectively can be implemented quickly and will make a positive difference in getting people to work. This agenda addresses the various unique problems of youth unemployment, low-income unemployment, long-term unemployment, middle-income unemployment, and the need for additional safety net services in this time of crisis.
1. Double or triple the size of Ameri-corps. This will address the serious problem of high youth unemployment while also providing a major increase in the numbers of young people serving the community.
2. Fully fund Head Start. This will allow for the hiring of thousands of additional teachers who can provide educational options for the very young children of low-income families so that the parents can work.
3. Stimulus to states sufficient to hire back public workers who have been laid off and expand services. This will restore thousands of middle class public sector jobs while also restoring safety net for those still in crisis. The scale of lay-offs in the public sector in the past two years was based solely on right-wing economic nonsense. The federal government should have been providing money sufficient to prevent lay-offs to the states for fire, police, teachers, and public works without interruption for the last several years and it should do so until the economy recovers from this depression.
4. Stimulus for expanded infrastructural projects such as roads, bridges, high-speed rail, and ports. The president has already suggested this, but it should be reiterated because it is so important for working class jobs and for building a stronger and safer national infrastructure.
5. Institute a “tax penalty for profit hoarding and excessive executive pay” program that will penalize companies for increasing profits and executive compensation at the expense of additional hiring. The penalty can be reduced for additional hiring. It is time we used the tax code to provide real incentives for hiring in companies that clearly can afford to do so. Previous “tax incentives” have been largely give-aways to companies who either did not have to keep their hiring promises or were just going to hire anyway; it was a signature component to the Republican’s “More Redistribution Upwards” policy.
6. Allow long-term unemployed (those on EUC) to keep 100% of their UI benefit while working part-time. This addresses long-term unemployment by letting UI claimants work part-time or temporary jobs without compromising their benefits, It gives employers an opportunity to train long-term unemployed on the job by subsidizing income for period of EUC. See an earlier post I wrote that explains this idea more fully.
7. Extend EUC for at least one more year. Despite decreases in unemployment rate in some states, unemployment remains severe and unprecedented times call for unprecedented support. Anyone who thinks the program is too expensive should volunteer to be laid off for a year and a half and try to live on his or her state’s unemployment compensation. Or better yet, try living without any compensation.
8. Payroll tax cut for small business employers AND workers. This may help spur some hiring, but mainly addresses a break in costs for both. The payroll tax cut for employers should be reserved for employers who do not qualify for tax penalty for profit hoarding. The tax penalty for profit hoarding will counter-balance the perceived disincentive to hire due to payroll taxes with the increased tax burden on profit-hoarding instead of hiring. The Republicans actually want workers to pay the payroll tax and for employers to get the cut. And you thought Republicans hated taxes. No they don’t – as long as low- and middle-income workers pay them.
The president should also throw out a ninth component – a modern-day Works Progress Administration (WPA). The fact that such an idea has not been seriously considered by the president or his administration until now is astonishing. It is an idea rooted in economic crisis and implemented by a scion of the ruling class. It paid off many times over. Many of the public structures we marvel at today are products of the WPA. The president should insist that the federal government use its power as an employer to make sure that everyone who wants a job has one. There is plenty of work to be done and plenty of people who need and want work. Why, the president should ask, do the Republicans want to prevent people from working? Why is it okay to go into debt to finance tax cuts for the rich, but not to invest in our working people and our infrastructure, hard and soft? The rich have never had it so good in the modern era, and since 2002 they have had the lowest tax rates in the postwar period. That’s nearly ten years. Why are the not hiring? In fact, we’ve been economically stagnant for this entire period of monumental millionaire and billionaire tax cuts. Where’s the trickling down? It’s nonsense; an economic “theory” designed to redistribute the wealth of the nation to the very few richest families. It’s time to end this nonsense and work together to build a better future for America. And we can start by learning from our own history. In the 1920s, there was no significant safety net, no serious regulation of business, and the rich enjoyed very low rates of taxation. We could say that that was nearly the same situation in the fall of 2007.
This agenda can’t do worse than more tax cuts for the rich and deregulation. After all, that got us where we are now. Go big, Mr. President! Go bold!
Originally published by this author at The Big Idea.