The last campaign was not about jobs. This one needs to be.
Esra Kline was right on target today.
Ezra reports on the results of a study by Stanford's Ed Lazear, the chair of Bushes Council of Economic Advisers.
The problem is not a structural mismatch of jobs and skills, it is that businesses rely on consumers for business and there are not enough consumers with enough disposable income to power an economic recovery.
As Ezra points out this is a solvable problem with a fairly easy fix in the form of a program that is not getting the exposure it should.
The unemployment problem they have, conversely, is the kind they could solve, or at least ameliorate, right now. The Obama administration even has a pretty good plan to do so: The American Jobs Act, which includes an expanded payroll tax cut, more infrastructure investment, better jobless insurance, a tax cut for firms that hire new workers, aid to state and local governments, and a program to rebuild schools and foreclosed properties. The law would cost around $450 billion, which the Obama administration proposes to pay for by closing tax breaks for richer Americans. Independent economists estimate it would create around two million jobs over the next two years.
Lazear and Spletzer constructed what they call an “industrial mismatch” index that compared vacancies and job openings in different industries. If the economy had suddenly developed a strong preference for one set of skills over another, we should see job openings in some industries skyrocket even as unemployment ((typo) rises). But that didn’t happen. “The industrial mismatch index in late 2011 is at the same level as before the 2007-2009 recession,” they conclude.We need some passion and conviction behind creating new living wage jobs.
This is good news. It’s much harder to solve a math-and-ATMs problem than a nobody-is-buying-anything problem. Retraining workers takes a long time and is hard to do. Improving schools only helps the next generation. The kind of jobless problem that politicians seem to want is, weirdly, the kind they can’t solve anytime soon.
The unemployment problem they have, conversely, is the kind they could solve, or at least ameliorate, right now.
We need a War on Unemployment and Underemployment.