NavigatingtheJobsCrisis:3StrategiesforRealEconomicRecovery Friday,11/20/20099:30ambyJamesH.

Carr

Inthewakeofthehighestunemploymentratein25years,theRoosevelt Instituteaskedhistorians,economistsandotherpublicthinkerstoreflectonthelessonsoftheNewDeal andexplorenew,bigideasforhowtogetAmericabacktowork.JamesCarrarguesfortargeting hardesthitcommunitieswithjobtrainingandaccess. Asthismonthsunemploymentnumbersconfirm,thenationseconomycontinuestosufferdespite recentpositiveandrelativelyimpressiveproductivitynumbers.Unemploymentnowexceeds10percent forthegeneralpopulation.UnemploymentforAfricanAmericansandLatinosexceeds15.5percentand 13percentrespectively.ForNativeAmericanslivingonreservations,itisjustbelowthefabledand feared25percentoftheGreatDepression.Forallfamiliesoutofwork,theeconomyisinadepression. Unabletofindasuitablejob,morethanathirdofthoseoutofworkareclassifiedaslongterm unemployed.Thelongertheyremainoutofthelabormarket,themoredifficultitwillbeforthemto reentertheworkforce.Italsomakesthemlesslikelytoregainajobpayingthesameorhigherwages thanthejobtheyhavelost,andmorelikelytorunoutofunemploymentinsuranceandpotentiallyend uponthestreetswithfew,ifany,options.Infact,priortotherecentextensionofunemployment benefits,roughly7,000peopleperdaywerelosingtheirbenefits. Manyeconomistsdismissthebadnewsontheemploymentfrontarguingthatunemploymentismerely alaggingindicator.Butarecoverywithoutjobsismeaninglessforfamiliesworriedaboutpayingtheir mortgages,purchasingfood,affordinghealthcare,sendingtheirkidstocollege,andsavingforadecent retirement.And,arecoverywithoutjobspresentstheprospectforfurtherdamagetothefinancial systemasgrowingnumbersofhouseholdsareunabletopaytheirdebts.Mostconcerning,continued significantjoblossesopenthedoorforapossibledoublediprecessiongiventhekeyroleplayedby consumerspending.

Whilethereislegitimateconcernoverthesizeofthefederaldeficit,thethreattotheeconomyof continuedhighlevelsofunemploymentismoreurgent.Theforeclosurecrisiswhichsparkedthe collapseofthecreditmarketsandeconomycontinuestogrow.Butunemploymentisnowtheleading reasonfamiliesarelosingtheirhomes.Moreover,morethan$13trillionofhouseholdwealthhasbeen lostsincethecrisisbegan.Whileitshardtoestimatehowmuchofthatwealthwasanillusion,muchof itwasrealsavings.So,moremustbedonetohelpthenationrecoverfromitssuddenanddramaticloss. Creation,retention,andaccesstojobsmustbeafocalpointforadditionalrecoveryspending,aswellas managementofcurrentavailablerecoverydollars.Employmentstrategiesshouldfocusonthreemajor efforts: JobtrainingthattranslatesdirectlyintorealjobsorcareersForthoseoutofthelabormarketor marginallyemployed,weshouldcreatejobtrainingprogramsintheformofapprenticeshipsthatare directlylinkedwithjobplacementandretentionstrategiesorfirstsourcehiringagreementswith industry.Jobtrainingprogramsshouldalsofocusonlongtermcareeropportunities(i.e.teach transferableskills,createopportunitiesforfuturetrainingandeducation,technicalassistanceforthose whowanttostarttheirownbusinesses),wraparoundservicesandongoingcasemanagement. IncreasedaccesstoexistingjobsforthehardesthitcommunitiesEveryagencywithinthefederal governmenthasannualcontractinggoalstoincreasetheparticipationofsmall,disadvantaged,and womenownedbusinesses.Adherencetothesegoalsvariesgreatlybyagencywithsomekeyprograms poorlyenforced.TheUSDepartmentofHousingandUrbanDevelopmentestimatesthatforoneofits largestprograms(Section3requirements),only25percentofHUDfundedrecipientsreporttheir complianceand80percentofthosereportingfailtomeettheminimumrequirements.Compliancewith thesetypesofguidelinesconsistentlyacrossagenciescouldchanneltensofthousandsofjobstothe hardesthitfamiliesandcommunitiesinAmerica. RebuildthemiddleclassWeshouldimplementpoliciesthatencouragethecreationofreliableand sustainablejobsthatallowfamiliestoearnalivingwage,receivereasonablebenefits,buildassets,and retireindignity.Investingincleanenergyandenergyefficiencyprogramscanreplacemany manufacturingjobsthathavebeenlostoverthepastfewdecadesandpositionthenationtobealeader inmanyindustrialjobsofthefuture.FederalpoliciesshouldalsoprotectAmericanworkersfromdirect competitionwithcountriesthatfailtorespectworkerrightsandnotrewardfirmsthatshipeconomic opportunitiesabroad.