Over one million new public service jobs could be created at a cost of $40 billion according to the Economic Policy Institute in a report released on Monday. The study projected that the new employment could be realized within a three-year time frame.
With unemployment at 10.2 percent, demand grows for immediate federal action to address the crisis. Members of the House of Representatives, all of whom are up for reelection in 2010 are on the verge of passing a jobs bill. Responding to constituent demands representatives in the Congressional Black Caucus recently held up committee passage of the financial reform bill demanding greater administration response to the economic woes of their constituents, including jobs.
On Thursday, the White House is hosting a jobs summit. Richard Trumka and other union officials along with business, community leaders and academics are attending. The AFL-CIO has put forward a five-point program to address the economic crisis including extension of unemployment benefits, applying unused TARP funds to assist small businesses and public works jobs on highways and bridges. The Obama administration wants to use left over TARP funds to pay down the deficit.
Paul Krugman, a Nobel Prize winning economist writing in the New York Times has called for a WPA-type government jobs program in the face of what he calls “a social and economic emergency.” “It’s time for at least a small-scale version of the New Deal’s Works Progress Administration, one that would offer relatively low-paying (but much better than nothing) public-service employment,” he said.
Krugman criticizes a “strange passivity” in Washington and has low expectations for the jobs summit. “Most of the people I talk to are cynical about the event, and expect the administration to offer no more than symbolic gestures.”
Importantly he adds, “But it doesn’t have to be that way. Yes, we can create more jobs – and yes, we should.”
The House of Representative’s jobs bill is likely to include an extension of unemployment compensation, tax credits and short-term transportation spending. The Senate is likely to postpone jobs legislation until 2010, says the New York Times “Senators Richard J. Durbin of Illinois and Byron L. Dorgan of North Dakota have been given the job of packaging jobs-related ideas into legislation this month with an eye to debate early next year.”
Much of the debate seems centered around the size of the federal deficit with a growing consensus that it should not be enlarged. However Krugman contends “All of this would cost money, probably several hundred billion dollars, and raise the budget deficit in the short run. But this has to be weighed against the high cost of inaction…”
Richard Trumka at a recent Washington jobs conference called by the Economic Policy Institute downplayed the importance of the deficit. Labor has knocked on one million doors recently he said, and no one has asked about the deficit.
Voices not supporting the deficit reduction argument are sure to be heard at the summit. “Some of the participants in the forum will urge Obama and Congress not to worry so much about deficits,” writes Mark Trumbull for the Christian Science Monitor. He continues, “rather, they will argue, the government should spend to create jobs either indirectly through tax incentives that affect private employers, or directly by government spending on roads, green energy, or community service programs.”
However, if Krugman is correct more may be needed to persuade Congress and the administration. In the 1930s large demonstrations prompted the passing of WPA legislation. “At one point during the Great Depression, 40,000 union members marched in the streets of Chicago demanding that the government give them jobs,” writes Bob Giloth for the Huffington Post.
More than 15 million workers are looking for employment.
Photo: Scott Marshall