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EconomicPolicyInstitute July 1, 2010

Over the course of the recession EPI has been sounding the alarm about the severity of the jobs crisis and the prospect of additional layoffs from cash-strapped state and local governments. At the same time, EPI also has been proposing large-scale job creation efforts to fight high unemployment. Over the past week, this message reached a broad audience in Washington and the national media.

Irons addresses President’s deficit commission
On June 30, EPI Research and Policy Director John Irons testified before the National Commission on Fiscal Responsibility and Reform that job creation must be the highest economic priority for policymakers. Major deficit reduction should not be on the table until “unemployment has dropped significantly and is on a downward trajectory,” he said. Irons recommended that no fiscal contraction should be seriously considered until the national unemployment rate – which stood at 9.7% in May – has fallen to 6%.

Contrary to what so many deficit hawks have argued, Irons stressed that “deficit reduction and job creation are not competing priorities.” In his testimony, he said, “Job creation is needed today to ensure a strong economy and a solid tax base tomorrow: you can’t reach reasonable budget targets without a
strong and rapid recovery, and you won’t get a strong recovery if you pursue austerity too early.”

Eisenbrey talks jobs on C-SPAN
During a June 27 discussion on C-SPAN, EPI Vice President Ross Eisenbrey also made the case for additional government action to create jobs and aid unemployed workers. To let unemployment insurance benefits lapse in the midst of a severe jobs crisis that has left five unemployed workers competing for every job opening, is “pretty close to criminal in my mind,” Eisenbrey said.  The full video of Eisenbrey’s discussion of the economy on C-SPAN can also be accessed from EPI’s Web site.

Also on EPI.org is a running tally of the number of workers who have exhausted their unemployment insurance benefits as a result of Congress’ failure to maintain extended benefits for jobless workers who have been looking for work for more than six months. To date, more than 1.2 million of these long-term unemployed workers have lost their benefits.

Protecting U.S. workers from damaging trade policies
EPI has produced two new analyses focused on international trade and the unfair advantages that some U.S. trading partners hold. In the Briefing Paper No Paper Tiger, EPI research associate Usha Haley  looks at the rapid recent growth of China’s paper industry, which has surpassed the U.S. to become the world’s largest. Haley, a chaired professor of international business at Massey University in Auckland, New Zealand, says that this rapid ascent has been fueled by more than $33.1 billion in subsidies from the Chinese government.

International Economist Robert Scott published an economic snapshot warning that a new free trade agreement between the United States and South Korea may be far more damaging to the U.S. economy than official forecasts suggest. Although the U.S. International Trade Commission (USITC) projects the new agreement will have a “minimal or negligible” impact on U.S. employment, Scott warns that “the USITC has a history of vastly underestimating the negative impacts that free trade agreements have on the U.S. economy,” and that past free trade agreements with China and Mexico have been far more damaging than forecast. “With U.S. unemployment close to 10%, and an employment gap of nearly 11 million jobs, it would be foolish and self destructive for the U.S. to implement a free trade agreement with Korea that leads to further job loss,” Scott says.

Who will fight for the unemployed?
This week, The New York Times published an editorial that argued — as EPI has long stated — that persistent unemployment was a bigger threat than rising deficits. “Without doubt, the two biggest threats to the economy are unemployment and the dire financial condition of the states, yet lawmakers have failed to deal intelligently with either one,” said the June 29 editorial, Who will fight for the unemployed?

EPI in the news
CNN quoted EPI Economist Heidi Shierholz in a story about the particular challenges older workers face finding jobs. Shierholz noted that most of the recent job growth has benefited workers under the age of 55.

–Deepak Bhargava, executive director of the Center for Community Change, cited EPI in a Huffington Post piece about the need for more government investment to create jobs. Specifically, Bhargava used EPI’s research showing that the upfront investment in job creation is offset by the benefits of keeping more taxpayers on payrolls and reducing safety net spending.

–Usha Haley’s paper on Chinese paper subsidies was cited in a number of media outlets, including The Wisconsin Rapids Tribune, The Birmingham News, and the York Daily Record.

From the EPI Blog
Lawrence Mishel and Will Kimball
The Top 1 Percent of Wage Earners Falters in 2013—Was it a Temporary Event?
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Myths and Facts About Corporate Taxes, Part 2: Will Congress’s Idea of “Base-Broadening, Rate-Lowering Tax Reform” Fix What’s Wrong With Our Corporate Tax Code?
Ross Eisenbrey
Corporations Are Stealing Your Constitutional Rights: Forced Arbitration Clauses
Lawrence Mishel
Chair Yellen Is Right: Income and Wealth Inequality Hurts Economic Mobility
Ross Eisenbrey
Businesses Agree—It’s Time To Raise the Minimum Wage
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