Labor & Employment Law

Government Must Spend to Create Jobs

By James Parks

Three years after the Great Recession officially began, nearly 27 million U.S. workers either are jobless or in need of full-time work. At the sluggish rate the economy is creating jobs, it will take up to a decade or more before pre-recession levels of unemployment are restored, according to a new report.  

But Americans can?t wait that long for jobs and the government must step in and spend what?s necessary to create jobs, says Rebecca Theiss, author of ?The Great Recession?s Long Tail: Third Anniversary Underscores Severity of Labor Market Woes,? released yesterday by the Economic Policy Institute (EPI).

During a press conference call yesterday, Theiss, an EPI policy analyst, said this was not a typical recession and the normal policies should not apply. With job growth still sluggish at best, the role of government must be as the spender of last resort, she said, and it should be spending more to create jobs like it did in the Economic Recovery Act.

In response to reporters? questions, EPI Research and Policy Director John Irons said although U.S. companies are sitting on record profits, they are not hiring. Instead they are working their current employees harder. He pointed to statistics showing the average number of hours worked dropped during the recession but now are starting to rise again. Irons said:

By restoring hours, we?re taking up work that could be going to new workers.  

Theiss said not enough attention is being paid to the plight of the long-term unemployed. Some 44.3 percent of unemployed workers?more than 6 million people?have been unemployed for six months or longer. That is a post World War II record.

African American and Hispanic workers also have been particularly hard hit by this recession and have experienced higher unemployment and underemployment rates, as well as larger declines in real median incomes. Long-term unemployment also has disproportionately affected African American workers, Theiss said.

Full post as published by AFL-CIO NOW BLOG on February 03, 2011 (boomark / email).