The biggest domestic policy failure has been the refusal of top officials in the White House and in Congress to recognize the severity of the employment crisis that has settled like a plague over American workers.
There is no longer any excuse for believing that the Great Recession and its aftermath was a more or less typical economic downturn to be followed by a robust recovery. That’s a pipedream. What we are experiencing is an economic disaster, the worst reversal to hit the U.S. since the 1930s. The human suffering is profound. Some 14 million Americans are officially counted as unemployed. Nearly half have been out of work for six months or more, and many have been jobless for a year or two or longer.
Poverty is once again on the march, moving like Patton’s Third Army through communities that had never had more than a tenuous hold on the American dream. The few jobs now being created too often pay a pittance, the minimum wage or just above, not nearly enough to pry open the doors to a middle class standard of living.
Starved of tax revenues, the federal budget is submerged in a vast ocean of red ink. One of the tragic results is that social services are under furious attack at the same time that the need for such services has grown enormously. If dramatic steps are not soon taken to put millions of jobless Americans back to work, the quality of life for much, if not most, of the population will be irreparably damaged. The American dream itself is at risk.
Politicians have given little more than lip service to this terrible turn of events. If there was but one message that I would try to get through to the nation’s leadership, it is that we cannot begin to get the United States back on track until we begin to put our people back to work.
And there is so much work to be done. Start with the crying need to rebuild the nation’s aging, deteriorating infrastructure – its bridges and highways, airports and air traffic control systems, its sewer and wastewater treatment facilities, the electrical grid, inland waterways, public transportation systems, levees and floodwalls and ports and dams, and on and on. Lawrence Summers, until recently President Obama’s top economic adviser, has pointed out that 75 percent of America’s public schools have structural deficiencies. Twelve percent of the nation’s bridges have been rated structurally deficient and another 15 percent are functionally obsolete.
Three to four trillion dollars worth of improvements will be needed over the next decade just to bring the infrastructure into a reasonable state of repair. Meanwhile, we’ve got legions of unemployed construction workers, manufacturing workers, engineers and others who are ready and eager to step into the breach, to take on jobs ranging from infrastructure maintenance and repair to infrastructure design and new construction. It shouldn’t require a genius to put together those two gigantic pieces of America’s economic puzzle – infrastructure and unemployment.
Yes, it would be expensive. But the money spent would be an investment designed to bring about a stronger, more stable economic environment. Putting people to work bolsters the economy and the newly-employed workers begin paying taxes again. Improving the infrastructure would make American industry much more competitive overall, and would spawn new industries. Creation of a national infrastructure bank that would use government funds to leverage additional investments from the private sector to finance projects of national importance would lead to extraordinary longterm benefits.
But even rebuilding the infrastructure is not enough. The employment crisis facing the U.S. is enormous and is taking a particularly harsh toll on the less well-educated members of the society. We need to take our cue from Franklin Roosevelt who understood during the Depression that nothing short of a federal jobs program was essential. The two-pronged goal was to alleviate the suffering of the unemployed and, as the workers began spending their wages, improve the economy.
Roosevelt put millions of Americans to work, including artists, writers, photographers and musicians. It was an unprecedented undertaking, and it worked.
We need a public jobs program in America now. A number of approaches have been offered, including a particularly thoughtful and comprehensive proposal prepared for Demos by Philip Harvey, a professor of law and economics at Rutgers University. The idea is simple: “Create jobs for the unemployed directly and immediately in public employment programs that produce useful goods and services for the public’s benefit.”
As Harvey’s report explains:
“When jobs program participants spend their wages, and program administrators purchase materials and supplies for program projects, the benefits delivered in the first instance to unemployed workers trickle up to the private sector, inducing private sector job creation that supplements the immediate employment effect of the job creation program itself.”
A crucial aspect of the program is that it would begin to fill the demand gap that is hampering the economic recovery. With so many millions of people out of work, the demand for goods and services is diminished. Consumers are tapped out. Private businesses are not hiring workers because the demand is not there for the additional goods and services they would be producing.
Direct job creation would put people to work quickly, without having to wait many long months, or possibly years, for the economy to fully recover. The money from their paychecks would be pumped immediately into the economy.
Like infrastructure spending, a carefully crafted direct jobs plan would be an investment that would be repaid many times over, just as investments in Hoover Dam, rural electrification, the Works Progress Administration and the G.I. Bill delivered enormous longterm benefits to the society.
F.D.R., in his first inaugural address, told a worried nation that “our greatest primary task is to put people to work.” It was a task, he insisted, that should be treated “as we would treat the emergency of a war.”
The question today, in one of our darkest economic hours, is whether we’re smart enough to heed that essential lesson of history.