Don’t Count on Job Growth. Bring Back the WPA!
Posted by Zachary Karabell Wednesday, May 11, 2011 at 10:05 am
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The monthly jobs report released last week by the Bureau of Labor Statistics proved to be a pleasant surprise. Nearly 250,000 more people were employed, for a total of more than 750,000 more jobs between February and April. While these numbers are the product of complicated formulas that are never quite accurate and will eventually be revised, they do capture the trend, and the trend now is toward a slow stabilization of the job market.
But it is stretch to claim – as many have – that we are seeing the flickering of substantial job growth. The unemployment rate actually rose, to 9.0%, because as more people use up their 99 weeks of unemployment benefits and reenter the workforce, they are finding jobs difficult to come by. Recent reports look decent only because most of the past three years have been so dismal, with millions of jobs lost and millions more having to pare back hours and wages. 250,000 new jobs a month barely suffices to keep pace with new people entering the workforce. This isn’t meaningful job creation; it’s the absence of significant job loss.
Our current approach is a combination of denial and wishful thinking (just give it time; the economy will expand; companies will hire). Then we spend money, reluctantly, on making sure those millions unemployed don’t starve. Treating unemployment as temporary albeit painful result of the recession, we hardly consider alternatives that might actually make a difference.
It is true that the employment situation has stabilized, and given fragile public psyche, that matters greatly. The fear of impending unemployment was itself a crippling factor in 2009 and 2010, triggering anxiety and caution as well as anger that is reflected all too well in public life. Confidence is an economic intangible, but the collective belief that problems can be solved and the future holds promise was an essential ingredient for American economic success in the 20th century and for China’s in the 21st. That belief has been sorely missing in America of late, and massive job destruction and wage stagnation have chipped away at America’s ability to address and redress issues.
Looking ahead, however, only rose-colored glasses could present a view of dynamic job creation. Yes, some manufacturing jobs are trickling back, but today when a new factory opens, it likely employs hundreds rather than thousands because of robotics and innovative processes that enhance efficiency. Healthcare has been one of the few areas that has consistently shown job creation, but the impending battles over Medicare, Medicaid and the structure of government-backed insurance almost guarantees that healthcare will start shedding jobs. Digitization of health care records, rightly lauded as an area ripe for efficiencies, will come at the expenses of health care workers. While nurses and orderlies will remain in demand as long as the population continues to age, other areas will see disruption. And housing – mired in foreclosures in multiple states and oversupply – is not likely to provide for substantial growth in construction job anytime soon.
Given this reality, we ought to be focusing on what to do about the stubbornly high unemployment that is coming to characterize the new American economy. Both Republicans and Democrats recognize the issue, yet both parties in Washington are now focused on budget cutting. The idea that cutting spending will magically energize the American job engine is ludicrous in the short-term. Meanwhile, Americans don’t like the idea of millions upon millions out of work, homeless and struggling for food, so we authorize unemployment benefits but call them temporary and pretend that we don’t have a social safety net when in fact we do.
These benefits currently cost about $100 billion a year by many estimates; those billions do little to create jobs and not much for the morale and confidence of workers. So, if we are going to pay people not to work, why not pay them to work? That was the idea of the New Deal Works Progress Administration and Civilian Conservation Corps. Those programs didn’t jump-start employment, but they did provide work as well as income. They also reversed years of despair that itself was impeding society. The Depression proved stubborn, but these programs changed the tenor and improved urban infrastructure – problems that sorely need attention today.
So why not? Doing this would be revenue neutral. We are spending the money on unemployment benefits anyway. It would satisfy the right and the emphasis on work and the left and the emphasis on safety nets. And it would serve the need for infrastructure. Of course, almost anyone in Washington will tell you it would be DOA in the current climate, and that means the tens of millions of people are likely to find the world a challenging place for a long time to come.