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By Jeff Madrick, originally published on Next New Deal

A new report from the Rediscovering Government Initiative lays out 15 ways the government can create more and better jobs starting right now.

After five long years, the economy has at last produced enough new jobs to compensate for the 8 million lost in the Great Recession of 2009. But in that same period some 7 million more Americans reached employment age, and we have only produced about half the jobs we need to keep up with population growth. To make matters worse, the jobs created during the recovery pay on average much less than those lost. Yet rather than pulling out all the stops to create more and better jobs, too many politicians and economists tell us we can’t move too quickly. They cite limitation after limitation: inflation fears, budget deficits, skills mismatches, and so on. Americans deserve better than this defeatism. We deserve bold action.

In a new report, A Bold Approach to the Jobs Emergency, the Bernard L. Schwartz Rediscovering Government Initiative offers 15 ideas that could get us back to true full employment and at the same time build a foundation for rapid economic growth in the future. We are demanding a full-court press to recreate the economic opportunity that America once offered. We emphasize some ideas that have been heard before, but many that are forced to the back seat or are hardly talked about at all.

There are taboos among policymakers that are holding us back. Above all, we must take fiscal stimulus seriously again. Today’s economy operates far below its growth potential. The fiscal stimulus we need should not only make the social safety net whole but also be tied to aggressive investment in transportation, communications, and clean technologies that have been badly neglected.

More analysis below the fold.

The federal government can itself create useful, good-paying jobs in transportation, teaching and health care. A carefully crafted federal job creation program, as was successfully enacted under FDR, can work today. Fifty billion dollars worth of new jobs could go a long way toward helping Americans.

The repressive effect on jobs and wages that results from aggressive Wall Street practices is all but invisible in Washington. Academic economists are almost as bad as the Washington think tanks in paying too little attention to how big finance can undermine both jobs and wages. Our report highlights the findings of researchers such as Eileen Appelbaum, formerly of Rutgers, and Rosemary Batt of Cornell, who show that the leveraged buyout and privatization crazes have on average led to many lost jobs and significantly less spending on R&D. It also showcases the work of William Lazonick of the University of Massachusetts, Lowell, who has long called attention to how massive corporate stock buybacks may help shareholders in the short run but hurt the American economy by diverting investment.

Poor wages are also part and parcel of America’s economic failure. Today’s typical household earns no more after inflation than it did almost 20 years ago. Only 44 percent of Americans think they are middle class, the lowest level recorded. However, until fairly recently, raising the minimum wage has also been taboo. The bill before Congress to raise the federal minimum wage from $7.25 to $10.10 may still not pass, but intelligently designed studies suggest such a hike could lift not just 1 million, as the Congressional Budget Office has too conservatively estimated, but 6 million people out of poverty and provide raises for about 25 million people. Similarly, we need an expansion of the Earned Income Tax Credit to childless adults, which the president supports.

Most tragically, we neglect our young. Six million or so Americans ages 16 to 24 are neither in school nor have a job. Dozens of local agencies have been created to place these “opportunity youth” on a middle-class track. But they badly need to be scaled up, and federal support is the only way to do so.

The new interest in funding pre-kindergarten in New York City and elsewhere is welcome. But help has to come much earlier in the lives of children in poverty. One in every five America children under the age of six live in poverty, the second-highest rate in the rich world. A growing body of research shows unambiguously how poor children are cognitively and emotional deprived—and how bleak their futures inevitably are. In America more than in any other rich country, inequality begins at birth. We need to address this crisis to begin building the economy of the future.

If America wants a strong future, it had also better invest more in technological research. Government research has been the heart of the innovation economy, as economists have increasingly shown. But Congress mindlessly cut such research last year. It must be revived and expanded. Other recommendations in our report include investments in energy, national paid family leave policies, and re-vamped workforce training.

The decline of work is not inevitable, and there are more ideas than the 15 we present in our report. We calculate that we can get the unemployment rate below 5 percent and raise wages with a combination of such programs, without incurring a dangerously growing budget deficit.

But bankrupt ideology, narrow politics, and bad economics are robbing the nation of its confidence and hope for the future. A comprehensive jobs plan is not even being attempted in America. Failure becomes contagious. Let’s end the fatalism about employment in America now and win back the nation’s hard-won optimism. 

Jeff Madrick is the Director of the Bernard L. Schwartz Rediscovering Government Initiative.

Originally posted to Daily Kos Economics on Wed Apr 09, 2014 at 02:56 PM PDT.

Also republished by Daily Kos.

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Comment Preferences

  •  A bold approach? (0+ / 0-)

    With this congress?

    Early to rise and early to bed Makes a man healthy, wealthy, and dead. --Not Benjamin Franklin

    by Boundegar on Sat Apr 12, 2014 at 04:17:05 PM PDT

  •  A bold Approach to the Jobs Emergency.. (9+ / 0-)

    ..and a perfect blue-print for Dems  - imo

    Open thread for night owls: Infrastructure investment would create a vast number of well-paying jobs


    Create More Jobs:

     1. Increase Fiscal Stimulus
     2. Invest In Infrastructure
     3. Fund Direct Employment
     4. Counteract Short-term Wall Street Strategies
     5. Regulate Private Equity
    Create Better Jobs:
     6. Raise the Minimum Wage
     7. Expand the Earned Income Tax Credit
     8. Institute National Paid Sick & Family Leave
     9. Protect the Right to Organize
     10. Enforce Labor Laws
    Create Future Jobs:
     11. Increase Public Funding of Research and Development
     12. Invest in Clean Energy
     13. Revamp Workforce Training
     14. Expand Programs Aimed at Opportunity Youth
     15. Reduce Child Poverty

    I remember an excellent Diary that BBB wrote on how things were in the past, when a one paycheck family could afford a home, college for the children and vacations each year, and many other more subtle things we've since lost track of or mostly  have been legislated away by the "conservative" movement.
     It phased me the way he described the picture in words.

    I can't find it now, but these remedies from the Roosevelt Institute remind me of what that picture was and could be

    Let's spread the word

    Also too; many of the provisions/proposals are within the progressive caucus  Better off Budget

     - cool Roosevelt Institute

    Let's make some noise and keep at it - the more the better :)

    •  reply (1+ / 0-)
      Recommended by:
      eagleray

      sounds great, but the repubs keep BLOCKING EVERYTHING!

      •  Recently in Wisconsin... (0+ / 0-)

        There was a cancer drug bill in the Legie - look it up for details.  Anywho, as is par for the course in our Koch-fueled Legie, all the right pols were bribed to defeat it.  So many people publicly shamed the bribed pols that they crumbled under the criticism and the bill passed.

        Well framed passionate arguments, the Bully Pulpit, Public Shaming - these can work.  In this case, will they work?  I can declare this with considerable certainty: they won't if we don't try.  Opening this rhetorical front has no downside, and if it digs the Overton Window out of the muck of the far right gutter, even a little, then it's all upside.

        The only reason the 1% are rich is because the 99% agree they are.

        by GreatLakeSailor on Sun Apr 13, 2014 at 07:31:00 PM PDT

        [ Parent ]

    •  Compared to what republicans are offering.. (4+ / 0-)

      ..up for the future:
      Open thread for night owls: 10 reasons holding back economic recovery
      ~~~~~~~~~~~~~~~

      remarkable, can't find a single issue on this list that is not part of the republican platform:

      Problem 1: wages are falling [] union busting, anti-minumum wage agenda

      Problem 2: the middle class is losing ground and getting hollowed out [] bail outs for banks but vehemently against investment in "Back to work" or similar proposals

      Problem 3: McJobs are taking over [] eg. Rick Perry gov. of Texas - and touts it too

      Problem 4: capital is hammering labor [] eg. wall street

      Problem 5: unemployment is twice what they say [] "excess labor pool" - considered an asset not a liability

      Problem 6: America is going part-time – and not for fun [] see above

      Problem 7: workers aren't working [] see below

      Problem 8: union wages are harder to come by. [] "right to work laws" for less

      Problem 9: the cost of college is skyrocketing [] privatization gouging public education - stated GOP goal to close down Dept.of Education too  

      Problem 10: inequality is getting worse [] VRA gutted - affirmative action next on the republican 'to do' list

      And that just covers the fiscal stuff. Austerity except for war making.
       The republican platfrom. And some people still believe in this voo-doo, trickle down fairy dust crap

      Thx again Roosevelt Institute

  •  Agree 100% (1+ / 0-)
    Recommended by:
    eagleray

    But when you have 1/2 of the legislative power bent on sabotaging the economy and the other 1/2 hiding under their desks, it will be difficult if not impossible.

    If we can inject a large dose of courage and selflessness and compassion in the rotten veins of DC it may happen if it doesn't kill them.

    Daily Kos an oasis of truth. Truth that leads to action.

    by Shockwave on Sat Apr 12, 2014 at 04:49:37 PM PDT

  •  Republicans know that the best way to (1+ / 0-)
    Recommended by:
    eagleray

    keep downward pressure on wages is to keep unemployment high.  And who benefits from lower wages?  

  •  The Republican "plan" is (4+ / 0-)
    Recommended by:
    Eric Nelson, eagleray, hbk, Caniac41

    1 - Cut any spending that doesn't benefit the 1%.
    2 - Increase spending that benefits the 1%.
    3 - Keep the poor in poverty.
    4 - Relegate the middle class to poverty.
    5 - Keep wages as low as possible.
    6 - Keep unemployment as high as possible.
    7 - Tax the lowest economic strata as high as possible.
    8 - Tax the highest economic strata as low as possible.

    Dozens of examples of each of the above points could be cited. Every vote in Congress reflects this "plan". Count the Republicans who endorse each point, and count the Democrats who oppose them.

    They don't want prosperity for the 99%. They actively oppose any legislation that would favor  the 99%.

    They are not on the side of the American people.

    Too soon old, too late smart (-7.25, -6.21)

    by Tim DeLaney on Sat Apr 12, 2014 at 05:00:40 PM PDT

  •  Can't afford a real recovery (0+ / 0-)

    The sad part is that at this point politicians in Washington don't want a real economic recovery because we could barely afford it.

    It the economy took off and the Fed had to start raising interest rates as would normally happen the cost of debt service would explode and start eating up a huge part of the budget.

    If interest rates ever got back to their historical averages we'd be spending probably $600 billion to $1 trilion a year on interest payments most likely and that would swallow the budget alive particularly at a time when the safety net was always going to be stretched with the boomers retiring.

    The Fed needs continued slow growth to keep interest non-existent so that the government can afford to keep the interest cost under control. It is already grotesque we spend the hundreds of billions we do on interest payments instead of things that really help people, even a small increase in rates would make the situation start to be very uncomfortable.

    The fact that the slow economy helps keep unemployment high and labor costs down is just a boon to them and the 1% constituents they represent.  

  •  US Chamber Of Commerce Magazine December 2007 (0+ / 0-)

    Peruvian President Alan Garcia briefed U.S. Chamber members on December 14 at the Hay-Adams Hotel, hours before joining President Bush to sign a free trade agreement (FTA) between the two countries at a White House ceremony. The ceremony capped off two years of work by the U.S. Chamber of Commerce to help gain congressional approval of the agreement.

    Garcia urged business leaders to take advantage of the FTA and invest in Peru. "Come and open your factories in my country so we can sell your own products back to the U.S.," Garcia told business leaders. Chamber Senior Vice President of International Affairs Dan Christman called on Congress to approve other pending agreements with Colombia, Panama and South Korea. "Peru is just the first act in a much, much longer running play.

    http://www.freeenterprise.com/...

    You Don't Happen To Make It. You Make It Happen !

    by jeffrey789 on Sat Apr 12, 2014 at 06:02:05 PM PDT

    •  That's a hopeless pitch (0+ / 0-)

      South American wage levels are far higher that Chinese wage levels and the infrastructure is much worse. 96h, and they're democracies with unions.)  On what basis would anyone build a factory in Peru to export back to the US?

      It's not the side effects of the cocaine/I'm thinking that it must be love

      by Rich in PA on Sun Apr 13, 2014 at 04:53:12 AM PDT

      [ Parent ]

  •  Trade Agreements cost people $1,800 a year (0+ / 0-)

    Trade Agreements cost people without a college diploma $1,800 a year. "

    Josh Bivens is its director of research and policy. He concludes in the new study, based on Krugman’s classic model, that trade with developing nations such as China reduced wages by 5.5 percent in 2011 for a typical American worker without a college diploma. That adds up to about $1,800 per year for an individual.

    One-third of the effect is entirely attributable to trade with China, Bivens writes.

    There’s a growing gap in America between college-educated workers and their less-educated counterparts. Since 1979, Bivens concludes, one-third of the increase in that gap has been attributable to trade.

    Wash Post, by Jim Tankerlsey on March 22, 2013

    http://www.washingtonpost.com/...

    You Don't Happen To Make It. You Make It Happen !

    by jeffrey789 on Sat Apr 12, 2014 at 06:05:04 PM PDT

  •  Employment, tariffs and the middle class (0+ / 0-)

    Bring back tariffs.  American industry was built with the aid of tariffs and became the world's largest economy. Now they are not even discussed by either major party as a means of restoring our industrial base and hemorrhaging wages for the middle class.

    Global corporations are not our friend. Neither are politicians sustained by their corporate sponsors.

  •  Global Economy Turns the Corner, 4/12/14 AP (0+ / 0-)

    U.S. Treasury Secretary Jacob Lew and Federal Reserve Chair Janet Yellen represented the United States in the discussions.

    The United States came in for criticism at the meetings. The IMF statement said officials were “deeply disappointed” with the continued delay in congressional approval of the legislation to provide expanded loan resources to the IMF to help countries in trouble.

    The IMF said that if the Congress failed to pass the measure by year’s end, it would explore other options. Officials said those options could weaken America’s ability to influence the global economy and lead to a more fragmented world.

    Such a development would produce “a world that will be less safe,” said Singapore’s finance minister, Tharman Shanmugaratnam, chairman of the IMF committee.

    http://www.theepochtimes.com/...

    You Don't Happen To Make It. You Make It Happen !

    by jeffrey789 on Sat Apr 12, 2014 at 06:55:56 PM PDT

  •  The American people will have to be miserable (0+ / 0-)

    enough to get over their own ideologies.....

    There's just enough hope to prevent that from happening....

    Would the majority support a windfall profits tax...no corporate nor private profits without jobs......

    You create jobs, pay down the deficit, and restore economic fairness....even for a short time.....

    But getting that not only through Congress but having the American people change Congress is a heavy lift.....

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