In the worst economic crisis since the Great Depression, there is a severe job shortage in the United States and the threat of a march on Washington by the jobless. But how severe is it, how did we get there and what should we do about it?
At his job summit last week, President Barack Obama estimated the country's job shortage to be eight million, but that figure appears to be on the low side. We know that 8.2 million jobs have been lost since December 2007, when the current recession began. But if we add in the number of jobs that ordinarily would have been created during this period, the figure jumps to 10.9 million.
The national unemployment rate is 10.2 percent, but that does not include people who have exhausted unemployment benefits. They are dishonestly assumed to have "given up" looking for a job, when in reality a person in that situation has only grown more desperate to find work. As such, the real unemployment rate is probably closer to 20 percent. Then there is the matter of underemployment, with 9.3 million people working part-time and many others holding temporary jobs or working in positions requiring a lower level of education, training, skills and experience than they possess. As it stands, there is a lot of potential going to waste.
How did we get into this mess? What we have is the long term result of economic policies that for nearly half a century have focused on companies maximizing profits, instead of emphasizing job creation. The basis for these short-sighted policies is the trickle-down theory, the lie that as a corporation amasses huge profits, it will use some of it to create more jobs. But companies tend to treat their employees as a cost of doing business, instead of an asset for their success and a source of the income which creates the demand that makes the economy go, when more than two-thirds of economic activity is consumer spending.
Job killing in the name of maximizing profits has given us NAFTA and other trade agreements, which have shipped jobs to Third World countries where workers are paid peanuts; corporate mergers and acquisitions, which destroy jobs while reducing competition; and downsizing, where deliberately understaffed companies overwork and stress-out their remaining employees. At the same time, we have seen a regressive redistribution of income.
What can we do to create as many new jobs as fast as possible? We can't rely solely on the private sector, for companies tend to be slow in hiring during a recovery, usually making it their last priority. The $787 billion stimulus bill, which doesn't emphasize direct job creation, has proved to be inadequate. But while ideological conservatives dishonestly claim otherwise, government spending is a more efficient method of job creation than tax cuts.
Along these lines, a bipartisan Congressional Jobs Now Caucus was recently formed, co-chaired by Reps. Bobby Rush (D-IL), Marcy Kaptur (D-OH) and Candice Miller (R-MI). Initially consisting of 112 Democrats and 17 Republicans, it has proposed a jobs bill that could include infrastructure projects, such as road, airport and school construction; fiscal relief for state and local governments; mending the social safety net with extended unemployment benefits, COBRA subsidies and nutrition assistance; and a tax credit for businesses that create jobs.
These proposals make sense for the short run, for the long run we need economic policies that seek full employment to avoid this boom and bust cycle. These should include requiring support from both employers and workers for any major economic policy; an end to job killing trade agreements, with severe tax penalties for sending jobs overseas; strict enforcement of antitrust laws to prevent mergers and acquisitions; increasing severance pay requirements to make it harder to slash payrolls; and strengthening the collective bargaining system through passage of the Employee Free Choice Act and a ban on hiring scabs.
Full employment and job creation should become the permanent goal of our economic system. After all, what is the purpose of the economy? Is it to provide for the material well-being of everyone or just a small, privileged elite of owners and executives?
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