Jobs Are Our Priority

Jobs, not Deficit Reduction, Are Our National Priority

The nation needs jobs, millions of them. In April, 2011, the official unemployment rate was 9.0%; 13.7 million people were officially unemployed. Nearly half of them have been out of work for over six months. Another 8.6 million were employed part time but wanted full-time work and many others were not included in the official numbers because they were not actively seeking work. Including these jobless and underemployed people gives a more accurate count of some 23.4 million people either out of work or working too few hours. This is nearly double the official count of the unemployed. (See graph and get more info.)

The official unemployment rate for people of color, teens, and young adults is even higher than for the workforce as a whole. Official unemployment is 16.1% among African Americans (roughly double the rate for whites) and 11.8% for Hispanics (about one and one-half the rate for whites). Teenagers face 24.9% unemployment while unemployment among 20- to 24-year-olds is 14.9%. Joblessness among people just entering the workforce is particularly devastating and has long term implications for their future earnings and career.
When people are not working, or working too few hours, they and their families suffer. They fall behind in paying their bills, cannot afford needed medical care and prescriptions, have difficulty providing their children with the things they need. They may face eviction or lose their car. This is our true national crisis. Congress must make job creation its priority.

People who are not working are also not paying income or payroll taxes. They buy less and pay less sales tax. Tax revenue falls for all levels of government. At the same time, the higher number of people relying on unemployment insurance, food stamps, Medicaid (medical care for the poor) and other safety net services drives up costs. The result is a budget deficit. Most of the current federal deficit is due to the economic downturn and will disappear once people are back at work. Congress must make job creation its priority.

When people are unemployed and buying less, firms produce less. They lay off workers. This is what happened in the depths of the recession. Each wave of layoffs led to more downsizing. Now the downward spiral has stabilized, but the economy has stalled. Firms will not hire new workers and expand production unless they expect a strong rise in sales. But as long as unemployment stays high, any increase in sales will be meager. Other ongoing weaknesses in the economy – the stalled housing market, rising food and gas prices, and others – mean that firms will continue to be cautious in their decisions around hiring and investment.

The only way forward is for Congress to enact a program of job creation. It could include projects like these.

  • Public investments in infrastructure such as roads, railroads, bridges, and schools, and in green jobs like weatherization of residences.
  • A public jobs program to hire people directly.
  • Additional money for state and local governments to preserve jobs and fund social programs.
  • A tax credit for private businesses to encourage and reward hiring.

Strengthening the economy and creating jobs are the nation’s top priority.  Deficit reduction must wait until the economy is back on a sound footing.

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CONTACT INFO

Ms. Edith Rasell, Ph.D.
Minister for Economic Justice
700 Prospect Ave.
Cleveland, Ohio 44115
216-736-3709
raselle@ucc.org