Source: Economic Policy Institute. Click here for more information; click again to close.
The official unemployment rate stood at 10 percent in December 2009. But that only tells part of the story. To understand the real magnitude of the recession, add those forced to work part-time or who have given up searching for a job altogether. That means a combined unemployment/underemployment rate of 17.3 percent. That’s 27 million Americans who need a full-time job. That’s double the number of people needing work in 2008.
We’re making progress, but not nearly enough. We still lost more than 7 million jobs since the recession began. According to the Economic Policy Institute, to fill the gap in employment and keep up with population growth, we need to create about 402,000 jobs a month over the next three years. That’s ambitious, but we’ve come close before: In 1994, the economy created an average of 320,000 jobs a month. But we never came close to that performance between 2001 and the start of the economic meltdown, and we’re certainly nowhere close to that right now.
The best jobs are disappearing most quickly. In December 2009, we lost a total of 85,000 jobs—but a third of those jobs were in the manufacturing sector. Overall, service-producing sectors have fared much better, and in some instances gained jobs, in the recession compared to the goods-producing sector. This indicates that workers may be settling for lower-paying jobs in order to find work.
America’s manufacturing sector has been on the decline as a result of offshoring, global competition and absence of a national industrial policy. In 1980, manufacturing jobs made up 20 percent of the workforce; today manufacturing represents just 9 percent of jobs. Since 2000, one in three manufacturing jobs has been lost—1.2 million of those in 2009.
We know what works. We just need the political will. We can jump-start the economy by putting people to work doing the work that needs to be done. Here are the facts:
- Every dollar spent on infrastructure projects generates $1.59 worth of economic benefits: people hired, goods and services purchased, taxes paid. Every dollar spent on corporate tax cuts or on making the Bush tax cuts for the wealthy permanent only generates about 30 cents of economic benefit. (EPI/Moody’s Economy.com)
- Every billion in federal transportation investment supports 35,000 jobs (SharedProsperity.org); every billion spent on school construction supports 8,000 jobs (Congressional Research Service).
- Each billion spent on the Apollo Alliance green-energy investment program would create 200,000 jobs; the full $60 billion program would create 1.2 million short-tern and long-term jobs, plus yield billions of dollars worth of economic and environmental benefits. (Apollo Alliance)
- A transaction tax on Wall Street trading of just 0.5 percent—less than one-tenth of the percentage tax many people pay in sales tax on clothes or a restaurant meal—would in 10 years cover the full cost of a robust jobs and economic recovery plan. It would have a negligible impact on routine stock trades but it could curb the kind of high-velocity, speculative trading that helped inflate the Wall Street bubble and set up the financial crash. (EPI)
With 27 million Americans out of work or underemployed, now is not the time to cut deficits and freeze spending. The Obama budget projects unemployment to be at 9.8 percent when the domestic discretionary spending freeze kicks in, and the biggest danger is that spending restraints will stall recovery—and increase deficits as mass unemployment continues.