There is no bigger national challenge right now than putting Americans pack to work, but little agreement on the magic formula that will create the consumer demand needed to jumpstart the economy and spark new hiring. Democrats favor more stimulus, Republicans argue for tax cuts and deregulation.
As I have written on numerous occasions, the evidence is squarely on the Democratic side of the argument. Spending on things like infrastructure, unemployment benefits, and food stamps is a more effective way to create jobs during the current downturn than tax cuts and deregulation.
This evidence may never convince certain supply-siders, but one point about jobs should be beyond dispute: More aid to state governments could stop job losses that serve to worsen and prolong hard times.
The employment numbers for October, released today by the Department of Labor, underscore this point. These numbers show very modest employment gains in various sectors of the economy, with 80,000 jobs added overall last month.
That's not nearly enough job growth to pull the economy out of its torpor. And one of the things that made this picture worse was that 24,000 workers were fired by the state and local government. That is about 775 people a day on average who lost their incomes and their benefits, being pushed into the abyss of the worst unemployment crisis since the 1930s. These workers are not only no longer paying taxes, but you can be sure that many have already signed up for unemployment, food stamps, and whatever other government help they qualify for -- nullifying some of the savings to the public sector of firing them.
Over 600,000 public sector workers have been fired since 2008. Many of these people are school teachers and teacher aides. (Although, in one bright spot, most of the public sector lay offs last month were in non-education areas.)
This just doesn't make sense, and staunching this flow of pink slips shouldn't be a partisan issue. Given the difficulty of creating new jobs, we need to preserve every existing job we can right now. President Obama's jobs legislation squarely addressed this issue by proposing to channel $35 billion to state governments to prevent further layoffs. There is no better example of how Washington could wave a magic wand to mitigate hard times than to just dispense that aid.
So far, though, this part of the American Jobs Act -- like all the other big pieces -- looks likely to die in Congress thanks to Republican opposition.