Where Are the Jobs? Part 2
Where Are The Jobs?
In Part One of our series, we analyzed how President Obama turned around the economy with the 2009 stimulus bill. The economy went from losing 700,000 jobs per month when Bush left office to a point where it has been creating around 90,000 jobs per month over the last quarter. As we discussed the economy is still growing slowly and there is still more work to do. Just what is holding it back? Why does the economy continue to grow slowly?
A big factor that is seldom discussed is that there have been huge layoffs of state and local employees since 2008. According to U.S. Department of Labor statistics, approximately 600,000 public sector employees have been laid off over the last four years. If it wasn't for all of those public sector layoffs, the unemployment rate would currently be around 7%.
Interestingly enough, 70% of those layoffs have occurred in states controlled by the Republicans. Moreover, the Republicans in the Congress have consistently opposed legislation that would send federal financial assistance to the states to reduce the number of those layoffs.
Another action that has weakened the economy was the Republicans' refusal to raise the debt ceiling until the 11th hour in 2011. This bogus crisis invented by the Republicans caused a huge drop in consumer confidence in the summer of 2011. That plunge in consumer confidence snuffed out a promising recovery in early 2011. In the first four months of 2011, the economy was creating an average of over 200,000 jobs per month. That job creation plunged after the Republicans threatened to default on our country's obligations.
An additional cause of the slow growth in jobs is the Republicans' refusal to allow an up or down vote on President Obama's American Jobs Act. This promising jobs plan totals around $450 billion in tax cuts and new infrastructure spending. This plan includes more than $250 billion in tax incentives for small businesses and employers. The rest of the money would be devoted to infrastructure spending, state aid and unemployment insurance.
Several leading and influential economists believe that Obama's plan would actually help the economy. The payroll tax cuts included in the bill are "very powerful," says Allen Sinai, chief economist of Decision Economics. "They provide a boost to direct income and, in turn, spending, which is important to growth." Mark Zandi, a former McCain economic adviser, estimates that the president's plan would boost economic growth by 2 percentage points, add 2 million jobs and reduce unemployment by a full percentage point next year compared with existing law.
When you add it all up, the Republicans' continued obstruction of President Obama's economic agenda has caused a sluggish economy and an unemployment rate of around 8.2%. In the absence of the Republicans, the unemployment could be 7% or maybe even as low as 6%. If that had occurred, we would be talking about "Morning in America" and President Obama would be headed to landslide re-election victory.
On several occasions, Senator Ben Nelson has correctly said that it's time to end the "job killing gridlock." It's pretty obvious that the Republicans are playing a dangerous game of politics with our nation's still too weak economy. It's time for the Republicans to put aside their partisan political considerations and work with President Obama and Senator Nelson to work out a compromise and pass some helpful economic legislation to put our people back to work. There are plenty of ideas in the American Jobs Plan that Republicans have supported in the past. It's time for the Republicans to cease prioritizing President Obama's job and put the needs of the American people first.
Dennis Crawford is our newly elected 2nd Associate Chair. He will begin serving his term on the NDP's executive board at the first State Central Committee meeting following November's election. Thank you to Dennis for his contribution to the NDP's blog.