On Tuesday, June 4th, the Roosevelt Institute’s Rediscovering Government initiative will host A Bold Approach to the Jobs Emergency, a daylong conference exploring the roles of government, policy, and activism in addressing historic levels of unemployment and economic misery.
A lot is said about the jobs crisis in America, but not enough. We have a full-fledged jobs emergency and jobs are the nation’s number 1 problem. We at the Roosevelt Institute are holding a full-day jobs conference in Washington on Tuesday, June 4th to address a wide range of solutions to the economy’s alarming inability to create adequate jobs. The conference is sponsored by Bernard Schwartz, who has strongly encouraged this focus at Rediscovering Government and agrees that jobs are America’s major concern. We hope to shift the political agenda by examining what this emergency is, where it came from, and how we might solve it.
The unemployment rate is the first line of evidence of our emergency but not the most disturbing. At 7.5 percent, it has dropped roughly two and a half percent percentage points since its height, but remains far from full employment four years after the Great Recession ended. As many now know, if we include part-time workers who want full-time jobs and discouraged workers, the unemployment rate is roughly 14 percent. In another analysis, between 2007 and 2009, one out of six workers lost a job.
Of greatest concern is the related employment-to-population ratio, which measures the proportion of the country’s working-age population that is employed. It is down to 58 percent from 63 percent. This shows that the only reason the unemployment rate is as low as it is has been is because people are dropping out of the labor force. Recent surveys also show that sharp decline in re-employment rates.
Then there is long-term unemployment, those out of work for six months or more, which is still millions of workers above its levels before the recession. New evidence shows that the long-term unemployed are “scarred.” They have measurably more difficulty getting new jobs than those out of work for a shorter time.
The emergency worsens because we not creating enough jobs to replace those lost, and the jobs being created are low wage or do not include retirement and healthcare benefits. Two of our conference participants, Annette Bernhardt and John Schmitt, have done original research on these issues. Their findings are alarming.
And what happens even when you get a new job? Researchers find that those displaced now experience sharp declines in wages over twenty years even when re-employed.
One reason I call this an emergency is that the two prior recessions and recoveries were also not creating jobs the way the U.S. once did. Job gains were late in coming in the economic recoveries after the recessions of 1990-1991 and 2001. Again, the jobs being created don’t match those that existed before. Today, the typical male earns less after inflation than he did in 1969. The typical household earns less than in 1999.
And what should worry us most is what is happening to the young. Employment-to-population ratios for teenagers and young adults have collapsed. This is a social explosion waiting to happen. Early job experiences influence future job outcomes.
So what are we to do? Economists almost universally call for more college attendance. But is that remotely enough? Infrastructure investment has rarely been more appropriate, but will the U.S. spend enough? What about the minimum wage, job standards, local activism, job training? Has Wall Street’s emphasis on short-term corporate profits and the attraction of capital to trading profits made matters much worse? Is globalization the source of most of these troubles?
Finally, are we simply growing too slowly? Washington gives us austerity economics when we clearly need more stimulus. How does one move this mountain of misinformation and uninformed ideology? Full-throated fiscal stimulus might well be an answer that gets us closer to full employment.
We have always found economists who argue there is a structural employment problem, claiming that we don’t have the workers who qualify for the jobs. The evidence for this is thin at best. We will discuss this issue as well.
This jobs emergency now requires a full-court press. That is why we have seven different panels to address these questions and a host of possible solutions.
Some insist we should talk mostly about what is politically practical. If we limited ourselves to what Congress might do, we’d have little to talk about. We must change their priorities. Jobs must be number one, but the nation cannot seem to admit that to itself.
We need, as one of my colleagues puts it, a job-creating president and a job-creating Congress. Jobs should be on everyone’s lips. Many talk narrowly about how only business creates jobs, yet corporate profits are enormous and job creation lags. I hope that with this conference, we will begin to pave the way to a far broader job-creating political agenda for 2014 and 2016.
Emergency light image via Shutterstock.com