Each year, the holidays bring a time for reflection and resolutions. As this year draws to a close, we look back on a period of almost unprecedented pain for millions of American workers—our family members, friends, and neighbors—who have lost their jobs or seen their hours and wages cut. For many months it has been clear to us at EPI that this suffering will be deep and enduring unless more is done. We have made it our top priority to develop and advance a policy agenda to generate millions more jobs in 2010 and to provide relief to the unemployed and their families.
This has been my personal passion, and it has been the work that has consumed EPI’s dedicated economists and staff over the past year. I am very proud to unveil the result of those efforts, EPI’s American Jobs Plan, which details a five-part strategy to put America back to work.
Today, almost 16 million Americans are out of work, and one-third of them have been unemployed for more than six months—a level of long-term unemployment not seen since the Great Depression. The official 10.2% unemployment rate does not count those who have had their wages or hours cut, or who are only working part time because they cannot find a full-time job. This widespread economic distress has left many people struggling to pay for basic expenses. Many have to choose between paying their rent, buying food, or filling prescription medications.
As we approach the New Year, I hope we’ll see stronger signs of recovery. But a robust, sustained recovery will not happen unless we act to create millions more jobs than are now expected. We now need about 11 million jobs just to return the country to the pre-recession unemployment rate. If we want to achieve that in two years, it would require creating at least 582,000 new jobs per month. It is a daunting challenge that the private sector cannot meet on its own.
EPI’s American Jobs Plan proposes an efficient way to create 4.6 million new jobs through a combination of fiscal relief to state and local governments, investments in transportation and schools, the direct creation of public service jobs, a tax credit to encourage private-sector jobs creation, along with programs such as extended emergency unemployment to strengthen the social safety net and put more money back into local communities. The plan proposes funding these job creation efforts with a modest sales tax on stocks and other financial products, which would begin three years from now. The financial sector not only threw us into a worldwide recession, it has also helped drive up the deficit. So, it seems appropriate to have their activities finance our recovery.
I am excited by the attention and the positive feedback the plan has already received. New York Times columnist Paul Krugman concurred with our calculations on the number of new jobs these efforts would likely create and said in a recent column that the plan would make “a big difference.”
In the coming days, EPI will distribute this plan to allies around the country, the media, and members of Congress. As consensus builds on the need for more robust action to create jobs, EPI will continue to be an important resource for policy makers.
As challenging as the past year has been, it is important to note that we would be looking at unemployment from 12 to 13% next year if the Recovery Act had not been passed.
That we remain in such a deep hole speaks to the severe nature of the crisis and the deeply flawed policies over 30 years time that laid the groundwork for today’s misery. Yes, we have made significant progress. But we have much more work to do. I will continue to be dedicated to this effort, as will the entire EPI staff. We look forward to working with you to put America back to work. Please visit www.americanjobsplan.org to see how we can all work together to make jobs creation a top policy priority.