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Without Jobs, Workers and Economy Struggle

This Labor Day North Carolina would do well to focus on how workers are faring.  Unemployment remains high and is increasing. Those without work for long periods are becoming discouraged and those in jobs are seeing their pay erode, benefits cut back and opportunities for mobility narrowed.  The evidence has been clear for some time: workers employed and unemployed alike are struggling.  As a result what is purported to be an economic recovery on paper, it turns out, doesn’t feel all that different from the downturn—and that isn’t good for anyone.

The reality is that without more jobs, workers in and out of work will continue to face growing economic hardships.  In turn, this will put pressure on state and federal budgets and hold down the prospects for sustained economic expansion.  Creating good, quality jobs is central to a tangible recovery, one characterized by expanded opportunity and greater shared prosperity.

So how can jobs be created when the private sector brings in historic profits but fails to invest in expanding its payroll?  Public policies and, yes, government must step in. There are plenty of proven and promising policies to choose from. They will all will require bold leadership from policymakers and our collective investment.

One being discussed at the national level is FAST, Fix America’s Schools Today. The program would address the backlog in improvements to schools that would make these buildings healthier and more energy efficient and put workers—particularly those in hard-hit industries like construction—back to work. It is estimated that addressing just one-tenth of the backlog in school maintenance and repair could create half a million jobs.   Closing fossil fuel loopholes would generate the funding for this effort, nearly $46 billion over ten years.

In North Carolina, as the state’s jobs deficit grows to more than 500,000, policymakers must use the best tools at their disposal to create jobs.  One option would be to implement a significant wage subsidy program, modeled after the Minnesota Employment and Economic Development program, which provided a subsidy to small businesses and non-profits to cover part of the wages and benefits associated with hiring an unemployed worker for a new post. The other is a short-time compensation or work-sharing program which encourages employers to reduce hours rather than lay off workers by using unemployment insurance funds to pay a portion of the wages that an employee would lose due to the reduction in hours. Employers retain trained employees and therefore are ready to quickly ramp up when the economy turns around, while employees maintain their earnings and thus continue to engage in consumer spending to drive a recovery.

State policymakers are also uniquely positioned to make sure that all jobs created—in the public and private sector—are good, quality jobs.  Making certain that taxpayer dollars subsidizing business attraction or expansion are delivered only when wage and benefit standards are met is one way to make that happen.  Ensuring that workers are paid for the hours that they work and that the minimum wage reflects more accurately the costs of living in today’s economy is another.

There is no lack of policy options.  What we need now is leadership.

3 Comments

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  2. Alex

    September 6, 2011 at 7:15 am

    Once we admit there are no term solutions to this problem, it may be possible to address the long term issues creating the current mess we are in. All of the short term ideas fueled with borrowed money have been a miserable failure. We need comprehensive tax reform, a sane energy policy, a moratorium on new regulations, revised trade agreements, an end to Afghanistan and Iraq, and a shift in education towards more technical training to develop our manufacturing base. Unless we do these things, all of the little short-term political ideas will only put us in deeper debt.

  3. david esmay

    September 6, 2011 at 10:30 am

    Alex, my god, I can’t believe I’m saying this, but I actually agree with you on most of these points. The collapse of our economy and manufacturing base didn’t happen over night, it will take years and a fundemental change both operationally and philosophically in regards to government and business. While I agree that these are some of the most pressing issues, we probably don’t agree on the means to solve them.