Senate Must Act to Extend Emergency Jobs Program

When Congress returns from its August recess, the Senate needs to act quickly to extend the TANF Emergency Fund, a program that has already created a quarter of a million jobs for unemployed parents and youth hardest hit by this savage recession.

The Center on Budget and Policy Priorities reports:

An emergency jobs program through which 37 states have provided subsidized jobs for nearly 250,000 otherwise unemployed parents and youth — helping families, businesses, and communities across America weather the recession — will end September 30 unless the Senate joins the House in voting to extend it.

The TANF Emergency Fund, which President Obama and Congress created in last year’s Recovery Act, has given states over $1 billion to operate subsidized jobs programs that have proved successful on multiple fronts. The fund has been a “win-win-win,” helping unemployed families find work, businesses expand capacity in a difficult economic environment, and local economies cope with the recession. Without the fund, some 120,000 young people would not have had summer jobs and some 130,000 parents would not have had jobs to provide for their families’ basic needs; they would also have lost a valuable opportunity to build skills for the future. (Appendix A lists the number of job placements by state.)

As the Emergency Fund’s September 30 expiration looms, states are ramping down their subsidized jobs programs, stopping new placements and giving notice that existing jobs will end. (While some of the subsidized positions were summer youth jobs that were slated to end in late August, most were for unemployed parents.) For example, Illinois plans to send notices shortly after Labor Day to 26,000 workers participating in Put Illinois to Work to inform them that their jobs will end on September 30. In San Francisco, where all except a few hundred subsidies will end on September 30, letters have already gone out to employers and workers.

Some states — generally with smaller subsidized jobs initiatives — will continue making some job placements after September 30 using other funding, but these programs will be significantly smaller than if Congress were to extend the Emergency Fund for another year. (The House has already voted twice to extend the fund for one year, which would cost $2.5 billion.) In short, failure to extend the fund would eliminate tens of thousands of jobs and squander an opportunity to create many more jobs for parents who are desperately seeking work.

Christine Owens, Executive Director of the National Employment Law Project, said last week:

“The Emergency Fund has tremendously helped states create new employment opportunities. By reauthorizing it, even more states will have the opportunity to take advantage of millions in jobs subsidies. If Congress fails to reauthorize the Fund, those subsidies will vanish along with the job opportunities they provide. Continuing the TANF Emergency Fund is a concrete step Congress can take to create jobs, along with passage of larger-scale programs like the Local Jobs for America Act,” said Owens.

“Now is not the time to be adding to the ranks of unemployed, or cutting back on much-needed jobs,” concluded Owens. “It’s imperative that Congress reauthorize the Emergency Fund before it expires at the end of the month.”

The Coalition on Human Needs today reported that job-holders and employers who have benefited from the TANF Emergency Fund’s jobs program will be in Washington, D.C. on Wednesday, September 15 to deliver a letter to Congress from hundreds of businesses across the country. They will be joined by groups from Pennsylvania, California and Illinois, urging the Senate to pass an extension of the program through September 2011, a measure that the House has already passed.

The author is the winner of the 2010 CREDO Mobile/Netroots Nation award for Blog Activist of the Year.

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Quick Takes on Another Sluggish Jobs Report

As former Chicago Mayor Richard J. Daley used to say, “on account of the time factor”… some quick links on the August jobs report.

Meteor Blades at Daily Kos:

Two positive things can be said about today’s jobs report from the Labor Department. First, it was significantly better than the one for August 2009, and June and July 2010 were not as bad as had been previously calculated. The stock market apparently loves the report since many experts were predicting far worse.

There were 60,000 jobs created if you leave out the Census. Overall: 54,000 jobs lost, with 121,000 government layoffs, including 114,000 Census workers. Private-sector jobs created: 67,000. Unemployment rate: a rise to 9.6 percent. Unemployment plus underemployment: a rise to 16.7 percent. Number of Americans officially unemployed: 14.9 million. Number unemployed, underemployed and so in despair they’ve given up looking: perhaps 16 million. The employment-population ratio: up a tenth of a point to 58.5 percent.

During the first eight months of 2010, fewer new private-sector jobs (763,000) have been created than were lost in January 2009 alone. At the current rate of new job creation, it will be mid-2017 before as many Americans are working as was the case 32 months ago when the Great Recession began.

Calculated Risk:

Nonfarm payrolls decreased by 54 thousand in August. The economy has gained 229 thousand jobs over the last year, and lost 7.6 million jobs since the recession started in December 2007.
[...]
This is another weak report, however the upwards revisions to June and July were a positive. The participation rate increased slightly – and that is good news – but the unemployment rate also increased.

Brad DeLong:

Not a Good Payroll Report

The nearly stagnant pool that is the private sector job market shows just how desperately the private sector needs a public jobs stimulus.

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Where’s OUR New Deal?

If that’s the question you’ve been asking yourself, in one form or another, over the course of the past year or two, believe me you are not alone. Whenever the subject comes up people seem to respond with that instant sense of recognition and a one word accompaniment: “Right?”

By now it’s clear that a sizable consensus of all but the most wackadoodle economists think that the stimulus measures in the original Recovery Act were far too small. As the Congressional Budget Office continues to report, those stimulus measures have had a positive impact on the economy. And without them, things would have been far, far worse. But for all of the benefits of the Recovery Act — extended unemployment insurance, COBRA health subsidies, highway and rail projects, TANF low-income-family employment programs, the largest tax cut for the middle-class in history, Medicare assistance for states and education aid for the nation’s schools — it just wasn’t big and bold enough to create the millions of new jobs needed to restore full employment.

Now, with the economic impact of the original stimulus winding down, the job market, the housing market and the economy overall are worsening again. The Republican obstructionists, especially in the Senate, have succeeded to a large extent in thwarting additional measures to boost the economy. Those measures that have passed, including a partial extension of unemployment benefits and aid to states, were substantially reduced in funding and scope even as they took months off the legislative calendar. Larger jobs bills were at least temporarily abandoned. Even a small business lending bill is stalled.

Caring not a whit that their obstruction is itself a cause of deepening misery for millions and increasing economic woes for the country, Republicans are betting that a worsening economy will work to their political benefit in November.

Unemployment remains staggeringly high. For more than a year, the monthly jobs figures have reported roughly 15 million American workers unemployed. That’s more jobless workers in our country than there were in 1933, at the depths of the Great Depression.

Meanwhile, calls are mounting for additional stimulus, particularly large-scale public-funded jobs programs, amid warnings that not acting would have devastating consequences. As Paul Krugman wrote recently:

The markets aren’t demanding that we give up on job creation. On the contrary, they seem worried about the lack of action — about the fact that, as Bill Gross of the giant bond fund Pimco put it earlier this week, we’re “approaching a cul-de-sac of stimulus,” which he warns “will slow to a snail’s pace, incapable of providing sufficient job growth going forward.”

With so little additional hiring by private businesses, it is increasingly clear that the private sector needs a public jobs stimulus.

A number of renowned policy voices have been even more strident of late in demanding that major, long-past-due efforts directed at large-scale job creation become the singularly crucial focus.

Robert Reich on ‘The Jobs Emergency’:

With the worst jobs crisis since the Great Depression worsening, you might expect emergency action out of Washington. But the biggest upcoming debate there is whether to extend the Bush tax cuts for the richest 2 percent, or for everyone, or for no one. This is like debating whether to get a mousetrap when your home is sinking in quicksand.

We need a response proportional to the crisis.
[...]
First item on the agenda: establishing a federal bank that will provide states and locales zero-interest loans, to be repaid when their unemployment rates drop to 5 percent or below.

Second item: eliminating payroll taxes on the first $20,000 of all incomes and make up the difference by subjecting all income above $250,000 to the payroll tax. (Remember, the wealthy save most of their after-tax income, lower-income Americans spend it.)

Third item: recreating the WPA to hire Americans directly. The Works Progress Administration put Americans back to work during the Depression rebuilding the nation’s infrastructure.

The jobs emergency requires no less.

And in a withering critique, titled ‘Fire and Imagination’, Bob Herbert urges the Obama administration to “re-examine what it might do to improve what is fast becoming a depressing state of affairs.”

Mr. Obama’s problem — and the nation’s — is that in the midst of the terrible economic turmoil that the country was in when he took office, he did not make full employment, meaning job creation in both the short and the long term, the nation’s absolute highest priority.

Besides responding to the nation’s greatest need, job creation would have been the one issue most likely to bolster Mr. Obama’s efforts to bring people of different political persuasions together. In the early months of 2009, with job losses soaring past a half-million a month and the country desperate for bold, creative leadership, the president had an opportunity to rally the nation behind an enormous “rebuild America” effort.

Such an effort, properly conceived, would have put millions to work overhauling the nation’s infrastructure, rebuilding our ports and transportation facilities to 21st-century standards, establishing a Manhattan Project-like quest for a brave new world of clean energy, and so on.
[...]
Think of the returns the nation reaped from its investments in the interstate highway system, the Land Grant colleges, rural electrification, the Erie and Panama canals, the transcontinental railroad, the technology that led to the Internet, the Apollo program, the G.I. bill.

The problem with the U.S. economy today, as it was during the Great Depression, is the absence of sufficient demand for goods and services. Consumers, struggling with sky-high unemployment and staggering debt loads, are tapped out. The economy cannot be made healthy again, and there is no chance of doing anything substantial about budget deficits, as long as so many millions of people are left with essentially no purchasing power. Jobs are the only real answer.
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During the Depression, Franklin Roosevelt explained to the public the difference between wasteful spending and sound government investments. “You cannot borrow your way out of debt,” he said, “but you can invest your way into a sounder future.”

Now, with so much money already spent and Republicans expected to gain seats in the Congressional elections, the president finds himself with a much weaker hand, even if he were inclined to play it boldly.

Perhaps he can still. In fact, he must. The ideas needed to re-employ millions of Americans are not what’s lacking. There are plenty of effective ideas, and plenty of ways to finance them as well. What is needed is the resolve to put them forward and fight for their effective implementation. And not in two years or three years. Much sooner. Like now.

In a recent speech, Franklin Delano Roosevelt’s grandson, Curtis Roosevelt, described the situation facing FDR in the late summer prior to the 1934 mid-term elections during his first term, in the context of the situation facing President Obama today. The full text makes for some fascinating reading; but for our purposes here, I’ll offer some relevant excerpts.

Needless to say, looming in the background for both Presidents were and are the mid-term elections. Both — 1934 and 2010 — were and are predicted to be resounding defeats for the Democrats.
[...]
Looming over Roosevelt’s head was the Great Depression, already entrenched for several years when he became president.

During the first year and a half of FDR’s first term, as his grandson recounts, FDR’s New Deal had largely focused on addressing the banking and financial crises. And while progress had also been made to help stabilize employment in some industries, and to improve wages and working conditions for many of those workers with jobs, vast numbers of workers remained unemployed. In 1934, what we’ve come to view as the core signature programs of the New Deal — the Works Progress Administration (WPA), Social Security and unemployment insurance — were yet to be enacted. That would come a year later, in 1935.

Curtis Roosevelt continues:

Roosevelt biographer Arthur Schlesinger Jr., described FDR’s dilemma during the few months before the 1934 mid-term elections. “Roosevelt, suddenly silent and irresolute, seemed to have lost his touch … The administration appeared to lack coherence both in policy and in strategy.” Schlesinger added, “these were hard days for the President. He knew that things were going badly … Roosevelt faced the organised business community [and] its determination to halt the New Deal …[He] faced the tumult of mass opinion, so ardently stirred by the radicals and demagogues … Overhanging was the threat of judicial action against New Deal laws and programs.”

The most influential historian of the day Charles A. Beard forecast doom for FDR in 1934. He wrote: “the disintegration of President Roosevelt’s prestige proceeded with staggering rapidity during February and March.”

FDR could not have felt his accustomed confidence, and was certainly not wearing his usual jaunty air. Secretary of the Interior Harold Ickes recorded in his diary that he found his old friend “distinctly dispirited. He looked tired … and he seemed to lack the fighting vigour or the buoyancy that has always characterized him.”

Reviewing the criticisms leveled against New Deal programs was apparently instructive for the president. Roosevelt listened to his advisors suggesting one or another alternative, one option against another. And then he pondered … and pondered … taking his time, much to his aides’ frustration. “He knows nothing about economics!” was the usual charge exchanged among them.

Then, suddenly, FDR brightened and seemed to know how and where he wanted to move. His staff remained perplexed, but again Schlesinger gets it right.

“The basic reason for [FDR's] inaction was that he was simply unprepared to act … [His] inscrutable processes of decision were moving all too slowly within.” Concludes Schlesinger, “He could not lead until he knew where he wanted to go.”

My grandfather’s convoluted way of decision-making-from the stomach up to the heart, and then the head-was, as usual, right on. Later, historians would call it his natural intuition, or something like that.
[...]
In their next edition, Time magazine reported: “Franklin Roosevelt’s mood suddenly changed.” His whole legislative program was in the pot and boiling …The Social Securities Bill, the Banking bill, the Utilities Bill, the Wagner Bill, the fate of the NRA … Suddenly the irritability which had marked his recent actions dropped from him. Pronounced Time: “His ‘winter peeve’ was over.”

Yes, the New Deal was rolling again. Referring to the autumn term of Congress in 1934, just at the time of the November elections, Charles A. Beard radically changed his tune from only a few months before. “Seldom, if ever, in the long history of Congress had so many striking and vital measures been spread upon the law books in a single session.”

And the results of mid-term election of November 1934?

The Democrats increased their congressional seats in both houses, increased their governorships, and chalked up a higher proportion of the popular vote. So much for the pundits!

The Democrats’ recovery, I think, continued to be dependent upon Franklin Roosevelt’s very personal style. He seemed to sense his way through the political maze. Whatever, it remains an exceptional example of political leadership.

What FDR did in the late summer of 1934, was talk straight with and directly to the American people, fighting for expanded public job-creation programs on a scale to re-employ millions of unemployed American workers.

In his famous Fireside Chat radio broadcast of August 30, 1934, FDR said:

To those who say that our expenditures for Public Works and other means for recovery are a waste that we cannot afford, I answer that no country, however rich, can afford the waste of its human resources. Demoralization caused by vast unemployment is our greatest extravagance. Morally, it is the greatest menace to our social order. Some people try to tell me that we must make up our minds that for the future we shall permanently have millions of unemployed just as other countries have had them for over a decade. What may be necessary for those countries is not my responsibility to determine. But as for this country, I stand or fall by my refusal to accept as a necessary condition of our future a permanent army of unemployed. On the contrary, we must make it a national principle that we will not tolerate a large army of unemployed and that we will arrange our national economy to end our present unemployment as soon as we can and then to take wise measures against its return.
[...]
I believe with Abraham Lincoln, that “The legitimate object of Government is to do for a community of people whatever they need to have done but cannot do at all or cannot do so well for themselves in their separate and individual capacities.”

I still believe in ideals. I am not for a return to that definition of Liberty under which for many years a free people were being gradually regimented into the service of the privileged few. I prefer and I am sure you prefer that broader definition of Liberty under which we are moving forward to greater freedom, to greater security for the average man than he has ever known before in the history of America.

The Democrats’ predicted defeat in the 1934 mid-term elections was averted. The nation rallied to FDR’s side in the battle against unemployment — for jobs and economic recovery. The core New Deal programs that most directly benefited working Americans, both employed and unemployed, were largely enacted the following year. The WPA alone went on to employ 8 million American workers.

Franklin Delano Roosevelt’s impassioned statements, refusing to accept joblessness for millions of Americans, were stirring words indeed. But they were not merely words. FDR and his administration were resolved and committed to enacting big, bold New Deal plans — like the WPA — to re-employ America. And they knew that the costs of not doing so would, in fact, be far greater.

That’s the resolve that was needed in 1934; and it is needed again today.

The author is the winner of the 2010 CREDO Mobile/Netroots Nation award for Blog Activist of the Year.

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Stagnant Private Sector Fails to Offset Overall Job Loss

The July jobs report released today showed a virtually stagnant private sector adding only 71,000 jobs last month, less than the 100,000-plus needed to simply keep up with historical additions to the labor force from population growth. According to the Labor Department, government job losses totaled 202,000 in July, including the loss of 143,000 federal Census workers and another 48,000 job losses among state and local workers, including 30,000 in education. Total non-farm payroll employment declined by 131,000 in July.

The official unemployment rate remained unchanged at 9.5 percent, but would have risen were it not for a decline of 181,000 in the size of the labor force. The number of workers not counted in the labor force increased by 381,000 in July alone. That number has increased by 2.8 million since July 2009.

Piling worse news on top of bad, June employment numbers were revised down by 96,000. June job losses were first reported to be 125,000. But the revised number released today put June’s job losses at 221,000.

The overall job losses for both June and July were fueled by the winding down of employment for the federal Census. Removing the Census jobs numbers for July produces an “ex-Census” net job increase of only 12,000 jobs nationally. Doing the same for the revised June figures yields a mere 4,000 net increase.

When we need to be adding on the order of 400,000 jobs a month to generate a sustained recovery for American workers, the jobs situation continues to resemble something more like a stagnant pool.

And the lines on those iconic job loss graphs from Calculated Risk are now looking worse instead of better.

CalcRisk_July_10_Jobs
click here for larger image at Calculated Risk

CalcRisk_July_10_Bottom
click here for larger image at Calculated Risk

The top graph shows jobs losses in recessions aligned for the month of maximum employment. The bottom graph displays job losses aligned for the month of maximum job loss at the bottom of the recession.

What’s striking is the correlation of the recent declines with the confluence of public sector job losses, virtually stagnant private hiring, and the sado-economic calculus of the Republican Congressional minority to thwart, block and oppose absolutely everything that could help the economy, American workers, and especially those suffering from unemployment. During June and July, for example, a Republican-led filibuster in the Senate kept a total of 2.8 million long-term unemployed workers from receiving any unemployment insurance benefits.

Several other deeply disturbing elements emerge from an analysis of today’s jobs report.

One is that the number of persons counted as unemployed for 27 weeks or more declined by 179,000 in July — the first time the number of long-term unemployed has dropped since the start of the recession. Why is that disturbing? Because that number virtually matches the 181,000 decline in the labor force and the estimated 200,000 jobless workers now exhausting all their extended unemployment benefits each month. It’s the ’99ers’ falling off a cliff.

Second is the fact that the number of newly unemployed workers has been increasing for each of the last four months. Those jobless for less than 5 weeks increased by 70,000 in July, according to the seasonally adjusted numbers in today’s report. And while initial unemployment claims dropped significantly during the last half of 2009, those claims have leveled off at a still-elevated rate for the last eight months, and have recently risen again. These are signs that the jobs market is not improving, and may in fact be worsening.

Lastly, since the start of the so-called recovery in GDP in July 2009, there has been no real change in the massive unemployment crisis. The number of unemployed Americans remains nearly 15 million and, according to every available measure, has been virtually unchanged in the last year. In fact, according to today’s report, the measures of unemployment designated U-3, U-5 and U-6 are all actually up slightly from a year ago.

With today’s jobs report showing a virtually stagnant private jobs market, and with deflationary expectations increasing, no further evidence should be needed to show that the private sector needs a public jobs stimulus.

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Listen for the Cry of “Uncertainty”

When the July jobs report is released this coming Friday and its results are, as expected, less than stellar, you will no doubt soon be assaulted by stories like this from the business mouthpieces and Wall Street pundits.

Confronted with incredible uncertainty about the future business climate brought about by massive regulatory and tax changes, they are sitting on cash instead of investing in capital equipment and, especially, hiring new workers.

Ah, yes, it’s that “incredible uncertainty” — not the very real and very depressed economy itself — that’s the cause of weak private sector investment and hiring.

The business mouthpieces will surely be promulgating the “uncertainty” smokescreen, just as their confidence men pursue the sado-economic Republican austerity drive that itself is further weakening the already weak economy.

As we’ve been saying, the private sector has shown that it’s not going to expand employment on a scale large enough to bring unemployment down significantly, unless they see a need to respond to a real boost in demand. That’s why the private sector needs a public jobs stimulus.

The author is the winner of the 2010 CREDO Mobile/Netroots Nation award for Blog Activist of the Year

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