Published: Thursday, December 3, 2009
Job No. 1 for summit: More jobs
-
John Smierciak / Associated Press
From left, Judy Dunlap, principal of Westside Leadership Academy in Gary, Ind., stands in a classroom with teachers Carrie Ruthland, Benita Nicks and Denise Bacon. Dunlap was able to save eight teaching jobs at the academy through the economic stimulus package passed by Congress.
The question is jobs, but there’s no one right answer.
When President Barack Obama convenes a jobs summit today, he and all the brainstorming economists and CEOs, small business owners and labor leaders face a dire predicament with no simple solutions.
The nation’s unemployment rate has climbed to 10.2 percent, the highest since 1983. Some 15.7 million Americans are out of work. The average jobless worker has been unemployed for more than six months.
Meanwhile, the immediate benefits of the economic stimulus passed by Congress earlier this year are fading. The recession may be over, but analysts say many of the jobs lost in the downturn probably will not return and high unemployment is likely to persist.
The Associated Press spoke with a variety of experts, looking for ways to create and preserve jobs. They offer four strategies they say should be in the mix at the jobs summit.
Work sharing. When home construction fell sharply, orders coming in to Gary Melillo’s department at a factory in Cranston, R.I. suffered. Workers at Taco Inc. continued building heating, ventilation and air conditioning equipment to fill the plant’s inventory. But if business didn’t pick up, it was clear there wouldn’t be enough work to go around.
Workers in some departments at Taco were cut back to either a three-day or four-day week. Unemployment insurance covered more than half their lost wages and they kept benefits including health insurance. This year, all Taco’s 292 production workers in Rhode Island and Massachusetts have been on work-sharing at some point.
At least 17 states have some version of work-sharing, including Washington. Broader, more aggressive use of such programs could prevent job losses, which goes hand-in-hand with creating jobs, Baker said.
Tax holidays. Small businesses are a job engine in an expanding economy. But many are just trying to get by now in the face of slumping sales.
To help them avoid laying off workers and encourage them to hire new ones, some business groups are calling for a payroll tax holiday that would give all companies a break from Social Security and Medicare payroll taxes, which total 15 percent.
Half the tax is paid by the employer, the other half by the employee. Suspending the taxes would lower the cost of both existing and new workers while at the same time putting more money in the pockets of employees. That, in turn, could boost consumer spending, which powers about 70 percent of the economy.
A new job corps. Former government job programs have been criticized as wasteful because they were ripe for polical patronage.But a new program could include better oversight, probably by having states monitor local administration of hiring, some experts suggested. Patronage could be limited by setting clear eligibility cutoffs, perhaps requiring that workers hired must have been unemployed for at least six months or a year.
If such a program were put in place, it could very quickly have an impact in areas where unemployment is high.
Direct aid to states and cities. With money collected from taxes down and its budget under pressure, the Gary, Ind., school district had to find spending to cut. Nero Lawrence and more than 250 other administrators, teachers and custodians lost their jobs in the fallout.
A couple of weeks later, armed with about $6 million in stimulus money, the district called to offer Lawrence a new job counseling at-risk students, making sure they attend school, visiting their families at home and doing tutoring.
The Economic Policy Institute, a liberal think tank, estimates that states and localities face about $330 billion in shortfalls over the next two years. Providing $150 billion in budget relief would save or create more than 1 million jobs, EPI estimates.
When President Barack Obama convenes a jobs summit today, he and all the brainstorming economists and CEOs, small business owners and labor leaders face a dire predicament with no simple solutions.
The nation’s unemployment rate has climbed to 10.2 percent, the highest since 1983. Some 15.7 million Americans are out of work. The average jobless worker has been unemployed for more than six months.
Meanwhile, the immediate benefits of the economic stimulus passed by Congress earlier this year are fading. The recession may be over, but analysts say many of the jobs lost in the downturn probably will not return and high unemployment is likely to persist.
The Associated Press spoke with a variety of experts, looking for ways to create and preserve jobs. They offer four strategies they say should be in the mix at the jobs summit.
Work sharing. When home construction fell sharply, orders coming in to Gary Melillo’s department at a factory in Cranston, R.I. suffered. Workers at Taco Inc. continued building heating, ventilation and air conditioning equipment to fill the plant’s inventory. But if business didn’t pick up, it was clear there wouldn’t be enough work to go around.
Workers in some departments at Taco were cut back to either a three-day or four-day week. Unemployment insurance covered more than half their lost wages and they kept benefits including health insurance. This year, all Taco’s 292 production workers in Rhode Island and Massachusetts have been on work-sharing at some point.
At least 17 states have some version of work-sharing, including Washington. Broader, more aggressive use of such programs could prevent job losses, which goes hand-in-hand with creating jobs, Baker said.
Tax holidays. Small businesses are a job engine in an expanding economy. But many are just trying to get by now in the face of slumping sales.
To help them avoid laying off workers and encourage them to hire new ones, some business groups are calling for a payroll tax holiday that would give all companies a break from Social Security and Medicare payroll taxes, which total 15 percent.
Half the tax is paid by the employer, the other half by the employee. Suspending the taxes would lower the cost of both existing and new workers while at the same time putting more money in the pockets of employees. That, in turn, could boost consumer spending, which powers about 70 percent of the economy.
A new job corps. Former government job programs have been criticized as wasteful because they were ripe for polical patronage.But a new program could include better oversight, probably by having states monitor local administration of hiring, some experts suggested. Patronage could be limited by setting clear eligibility cutoffs, perhaps requiring that workers hired must have been unemployed for at least six months or a year.
If such a program were put in place, it could very quickly have an impact in areas where unemployment is high.
Direct aid to states and cities. With money collected from taxes down and its budget under pressure, the Gary, Ind., school district had to find spending to cut. Nero Lawrence and more than 250 other administrators, teachers and custodians lost their jobs in the fallout.
A couple of weeks later, armed with about $6 million in stimulus money, the district called to offer Lawrence a new job counseling at-risk students, making sure they attend school, visiting their families at home and doing tutoring.
The Economic Policy Institute, a liberal think tank, estimates that states and localities face about $330 billion in shortfalls over the next two years. Providing $150 billion in budget relief would save or create more than 1 million jobs, EPI estimates.
Comments
(
