It’s time for a real jobs agenda

The unemployment numbers are staggering.

While the Obama Administration touts the official unemployment number, which shows a decline from 10 percent in October 2009 to 6.7 percent in the latest month (December 2013), the “real” numbers are substantially higher. If we include those workers who want to convert their part-time jobs into full-time positions and those who have left the workforce because they are discouraged, the unemployment number exceeds 13 percent. The jobless rate for low-skilled workers has reached as high as 36 percent for African-American teenagers and long-term unemployment reflects levels never seen before. Most ominous is the labor-force participation rate, which has fallen to its lowest levels in more than 35 years.

Washington’s answer to incentivizing people to work and to creating jobs is to double down on the same policies used since Franklin Delano Roosevelt was in office. The short answer is that most of the money and effort expended on creating jobs really goes to supporting the unemployed rather than helping them find gainful employment.

Michael R. Strain, in the lead article in the Winter 2014 issue of National Affairs, proposes a job agenda that can appeal both to conservatives and to liberals. First, government can play a meaningful role in investing in infrastructure by focusing on “longer-lived investment projects.” Forget the so-called, trillion-dollar stimulus of 2009 that turned out to be a payback to Democratic Party supporters. With interest rates at an all-time low, investments in our transportation industry, for example, would pay dividends for decades to come.

Second, roll back many of the licensing requirements that present an obstacle to creating new businesses. Why should a cosmetologist train for 372 days to receive a license while an emergency-medical technician may need just 33 days of training? Three, reform the disability system. The percentage of working-age adults collecting Social Security Disability Insurance (SSDI) benefits has doubled in 20 years from 2.3 percent of the population to 4.6 percent. SSDI is not intended to be a permanent alternative to work.

Four, any immigrant who earns a graduate degree in engineering, the sciences, technology, or mathematics should immediately become a permanent resident. These highly skilled individuals are responsible for creating a quarter of all the high-tech businesses in America. You want job creation; welcome these immigrants.

Five, promote entrepreneurship. Either reduce or eliminate the capital-gains tax and roll back the octopus of regulatory compliance that is often mindless and never seems subject to review. Six, offer assistance to unemployed workers who want to start businesses. Seven, open up federal lands to more energy exploration.a

Strain’s article also tackles a persistent obstacle to reducing unemployment: Encouraging the unemployed to move where the jobs are located. His suggestions include relocation assistance, sub-minimum wages with subsidies, and work sharing. The relocation assistance contains two parts: basic information about job availability and subsidies to the long-term unemployed to help finance moving from communities with high unemployment. In the past two decades, mobility in America has declined significantly. In the early 1990s, three percent of Americans moved each year. Today, the number is about 1.5 percent.

Our federal minimum wage law prohibits paying a sub-minimum wage. However, there are exemptions, such as those who receive tips, some full-time students employed in retail or at colleges and universities, and workers under the age of 20. There is nothing worse than letting your vocational skills atrophy through unemployment. A sub-minimum wage, paid for a limited period, coupled with subsidies or with the earned-income tax credit could get the long-term unemployed back to work faster and, in the long run, save money.

Strain’s last suggestion is to offer an alternative to layoffs. He proposes increasing work sharing, which is “the redistribution of labor hours among workers with the goal of reducing involuntary unemployment.” Workers would receive “short-time” unemployment insurance to compensate, in part, for the loss of income. Today, only half the states permit work sharing — leaving layoffs as the primary option exercised by employers.

America’s labor market is truly troubled. Every employer recognizes that productive human capital is not being utilized. While the economic tragedy is obvious, what is not really understood is the human tragedy of those who cannot find gainful employment. Their loss is not just monetary; it’s also a loss of dignity and their piece of the American dream.

It’s time for a real jobs agenda. It’s time to change our conventional thinking and sink more resources into creating jobs rather than into sustaining an environment that discourages the search for work.

Norman Poltenson is publisher of The Central New York Business Journal. Contact him at npoltenson@cnybj.com