How to Create Jobs in Five (Sort of Easy) Steps
According to the Economic Policy Institute, the United States needs 400,000 jobs PER MONTH between now and 2013 in order to get us back to our pre-recession unemployment rate. Even during the heady "peace and prosperity" days of the 1990s, we only added 200,000 or so new jobs monthly. The ugly long-term reality is that we're probably looking at unemployment in excess of 8% for years to come.
Rather than curl up into a ball and weep, as I'm feeling inclined to do right now, the EPI wonks have instead offered a 5-point jobs plan that is eminently reasonable and worth pursuing -- if only our political process weren't warped beyond repair. Much of the ground work for this plan, estimated to create four to six million jobs, has been laid by the stimulus. The key ingredients include:
- Continuing unemployment benefits and COBRA health insurance subsidies, though raising the latter to 80% to make it more affordable for more than just the two in ten households that currently use COBRA. Such spending creates a net financial benefit for the economy.
- Continuing to provide fiscal relief to states and localities through 2011 to retain about one million jobs.
- Substantially increasing transit investments -- only 6% of needed improvements are currently covered -- as well as school investments (modernizing aging schools versus building new ones, as we've been doing for the last decade, mainly for affluent students and kids in charter schools, no doubt);
- Creating one million public sector jobs in community development, public safety, child development and public services. For example, through federal anti-homelessness funding, local non-profits are hiring counselors to help tenants avoid eviction or find new, more affordable housing. Stimulus funding has also supported the creation of local health centers so resident inlow-income communities can get the medical and preventative care they need. We should specifically target funds for more initiatives like this that create jobs and improve lives and neighborhoods in the process.
- Providing a job-creation tax credit for employers to encourage hiring over the next two years. The tax credit offsets payroll taxes and would lead to the hiring of almost three million workers -- a vast improvement over the thousands of temporary workers companies are currently hiring.
We could pay for this plan with a 0.5% financial transaction tax on stock transfers -- yes, that's one half of one percent. (How does that sound compared to the 5-10% in sales taxes you regularly pay?) We already use financial transaction taxes to fund the Securities and Exchange Commission; if we implemented one more widely, we could raise almost $80 billion annually, according to congressional research. Given who owns assets in this country, it's unlikely that the majority of Americans would bear the cost of this tax compared to the upper 1-10% of Americans. But we would ALL feel the benefits!
What do you think?
Photo credit: Hillary Birch Vanaria for greenforall.org
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