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EconomicPolicyInstitute February 26, 2010

One of the biggest political barriers in the way of a major jobs creation effort is concern over the federal deficit. This concern is misplaced: The fact is that we can’t reduce the deficit without first creating jobs for the millions of Americans who are out of work.

EPI has come together with the Peter G. Peterson Foundation, which focuses largely on long-term fiscal issues, to stress that the U.S. must Address jobs now and deficits later.

EPI President Lawrence Mishel and Peterson Foundation CEO David Walker co-authored an op-ed, which was published February 24 in Politico. “With more than a fifth of the work force expected to be unemployed or underemployed in 2010,” the authors stress, “there is an economic and a moral imperative to take action.”

While Mishel and Walker may not share the same perspective on many policy issues or the proper role of government, they agree that the severity of the current jobs crisis means that “Today’s high deficits will have to go even higher to help address unemployment.”

So many jobs have been lost that the country entered 2010 with fewer jobs than it had a decade earlier. A survey conducted for EPI late last year found that one in four American families had suffered a job loss. Within the private sector, one out of every 20 jobs has been lost since the recession started in late 2007.

We now need more than 10 million jobs to get the country back to pre-recession levels of employment. The situation would be far worse were it not for the Recovery Act, but still it’s clear that much more needs to be done. Earlier this week, Mishel testified before the House Committee on Financial Services where he warned that unless Congress acts quickly and at a sufficient scale, “high and damaging unemployment will continue for years.”  EPI maintains that the Senate’s $15 billion jobs bill is too small and of questionable efficacy. EPI’s American Jobs Plan proposes spending $400 billion to create 4.6 million jobs in one year.

In their Politico piece, Mishel and Walker also agree on the need to develop a plan for addressing structural deficits, which are projected to persist even once the economy has recovered. But they argue that spending on job creation must come first.

Mishel and Walker said they co-authored the piece in an effort to change the thinking about job creation and deficit reduction, which too often are misrepresented as opposing goals. 

Their op-ed is available on Politico and on EPI.org.

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