One out of 10 American workers will not have a job for which to express gratitude this Thanksgiving.
If you add what the Bureau of Labor Statistics calls “marginally attached workers” and those who want to work full time but can find only part-time jobs, then the true employment picture looks even bleaker: 17.5 percent of the labor force is now either unemployed or underemployed. This is a disastrous situation, and you would expect voters to pressure the White House and Congress to address it. You would also expect the federal government to respond.
Still, is it asking too much of our politicians to avoid grandstanding on this serious issue? Apparently, it is. In the past week, we have seen members of the Congressional Black Caucus suddenly decide to hold up a financial reform bill to dramatize their demand for jobs in the African American community. Republicans and Democrats have taken to scapegoating Treasury Secretary Timothy F. Geithner, hectoring him at hearings and demanding his resignation, as if the mid-crisis decapitation of his department would solve anything. The Federal Reserve is the target of a bill freshly passed by the House Financial Services Committee that would open its monetary deliberations to political second-guessing. For its part, the Obama administration is pushing extension of a $375 million small-business credit subsidy that is more of a political symbol than an actual job-creator.
Grandstanders have their points. The African American community has been hard hit by the crisis. Mr. Geithner faces new questions about his handling (as a top Fed official) of the 2008 AIG bailout; an inspector general’s report argues that the government might have paid AIG’s Wall Street counterparties more than it had to. The Fed should not be immune from transparency, and small business can use all the help it can get.
But the fact is that there is no quick fix for unemployment, and it could be dangerous to behave as if there is one. Everyone knew that economic growth would resume before employment growth, and that is basically what has happened. Last week Fed Chairman Ben S. Bernanke warned with characteristic realism that the unemployment rate will decline “only slowly” as the economy continues to pick up in the months ahead. Productivity gains have reduced the need for workers at many firms; the first hires will probably be part-time workers going full time. Many factors are retarding business investment, for reasons ranging from still-weak consumer demand to uncertainty about the future of health care and taxes. One of the biggest fonts of employment growth before the bust was housing, which generated work for everyone from title attorneys to bricklayers. Today real estate is surviving, barely, on federal life support.
Extending unemployment benefits risks reducing some workers’ incentives to seek new jobs, but, given the weakness in the job market, that risk is outweighed by the need to ease economic hardship and bolster demand. Some unspent portions of the $787 billion stimulus package could be reprogrammed to provide temporary payroll tax and regulatory relief for small business or to fund infrastructure and public works projects selected to enhance the economy’s long-term productive capacity.
But those clamoring for government to “do something” about jobs must recognize that it is already doing an awful lot. Washington is running a $1.4 trillion budget deficit; the Fed is keeping interest rates near zero; and the stimulus money is still far from completely spent. The limits of prudent government intervention are already being tested. This is no time to test the limits of reasoned political debate as well.
— The Washington Post, Nov. 22