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EconomicPolicyInstitute November 24, 2009

EPI has joined forces with a coalition of national organizations in calling for more action to create jobs. On November 17, EPI hosted the panel discussion, Spotlight on the Jobs Crisis, where the heads of the AFL-CIO, the NAACP, and other groups warned that today’s high unemployment could stunt an entire generation’s lifetime earnings and devastate minority communities.

The coalition, which consists of EPI, the AFL-CIO, Center for Community Change, the NAACP, and the National Council of La Raza, issued an Urgent Call for Action to Stem the U.S. Jobs Crisis, recommending many of the same policy actions that EPI proposed last month in its five-part approach to large-scale job creation. These include additional aid to strapped state governments, public-sector job creation, as well as investments in infrastructure and tax credits to create private-sector jobs. The group also advocates extended emergency unemployment compensation and subsidies for COBRA health insurance into 2010.

Unemployment: The civil rights issue of our time
The Call to Action praised the Obama administration for moving swiftly earlier this year to pass the Recovery Act, which has already created at least 1.1 million jobs. But it stressed that additional help was needed. “The Great Recession is an unfolding social catastrophe,” said Deepak Bhargava, executive director of the Center for Community Change. “If we act quickly, a jobs program could put millions of people to work in 2010.”

Much of the discussion at the Spotlight on the Jobs Crisis panel focused on the groups hardest hit by the jobs crisis. Although the nationwide unemployment rate of 10.2% is the highest level seen in 26 years, it is much higher for communities of color: 13.1% for Hispanic workers and 15.7% for black workers.

“Make no mistake. This is the civil rights issue of our time,” Wade Henderson, president and CEO of the Leadership Conference on Civil Rights, said at the event. “There can be no equal opportunity without economic justice and a stable job that provides a living wage.”

Dire States
One component of the Urgent Call for Action, the need for more relief to state governments, was outlined in more detail in the Briefing Paper, Dire States, by EPI Policy Analyst Ethan Pollack. After drawing down rainy day funds, states face a two-year, $357 billion budget shortfall for the fiscal years 2010 and 2011, the paper shows, while local governments face an additional $80 billion shortfall. After accounting for budget relief provided by the Recovery Act, state and local governments will still face $331 billion in shortfalls that will have to be closed with spending cuts and tax increases. This would put a significant drag on economic growth and make it more difficult to get the economy back on track.

On November 19, EPI hosted the panel discussion Spurring Job Creation: The Role of Federal Aid to State and Local Governments, which featured Pollack and a group of other speakers discussing the severe budget crunches faced by most state and local governments. Douglas Palmer, the mayor of Trenton, New Jersey, delivered the keynote address, where he stressed that most of the country’s unemployment was concentrated in metropolitan areas like Trenton, which has a 17% jobless rate. Most U.S. cities are expected to make additional job cuts next year, he said.

900,000 more jobs could be lost next year
[Zandi]Mark Zandi (pictured), chief economist at Moody’s Economy.com said that while Recovery Act spending helped the economy expand in recent months, the economic recovery remained very fragile and could come under more pressure in late 2010 when the majority of stimulus funds runs out. He said additional budget relief to state and local governments would be needed to sustain the recovery. Another speaker, Iris Lav, senior advisor at the Center of Budget and Policy Priorities, said that without additional federal relief, the cuts that state and local governments would be forced to make to balance their budgets would cost an additional 900,000 jobs in 2010.

Eisenbrey on jobs in America, arbitration in Canada
EPI Vice President Ross Eisenbrey has been taking EPI’s five-point plan for job creation on the road. He presented the plan to a group of labor and business leaders and state and local government officials at a workshop at the annual meeting of the National Network of Sector Partners and the Insight Center for Community Economic Development. Eisenbrey also addressed the University of the District of Columbia’s Open Forum on Jobs Creation, where he debated solutions to the U.S. jobs crisis with Barbara Lang, president of the D.C. Chamber of Commerce, and Daniel Whitley, from the USDA’s Office of Global Analysis. New York Times columnist Bob Herbert called for enactment of a public service employment program, citing Eisenbrey’s statement that “By itself, the private sector is unable to create jobs in the numbers the United States needs to obtain a robust, full economic recovery.”

Eisenbrey also presented unpublished research on the success of first contract arbitration in Canada, during a November 13 event sponsored by American Rights at Work. Labor law in Canada’s Manitoba province includes a provision nearly identical to one in the Employee Free Choice Act that permits a party negotiating a first contract to choose mediation and then binding arbitration if no agreement is reached within 120 days. The research from Manitoba shows that although very few contract negotiations end with an arbitrator imposing a contract, the provision helps motivate labor and management to reach contracts on their own. In those cases in Manitoba that did go to arbitration, the results were generally positive. The system provides a model for the United States, where the majority of workers who do manage to form unions are still unable to bargain for a first contract in a timely manner, often because employers fail to bargain in good faith or use stalling tactics to preserve the status quo.

EPI in the news
The New York Times wrote about EPI’s Spotlight on the Jobs Crisis and the growing call by African American leaders for more policy action to create jobs. Politics Daily featured an interview with EPI President Lawrence Mishel outlining how a jobs creation program could be funded in part with a small tax on financial transactions. Given that financial transactions precipitated the economic collapse, Mishel said, “it’s not only poetic justice—it’s good economics and has great political appeal.” A Reuters story cited Pollack’s Dire States paper and said that looming state and local budget cuts were a “time bomb” for jobs.

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