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EconomicPolicyInstitute March 11, 2010

EPI applauds the new Local Jobs for America Act by U.S. Representative George Miller (D., Calif.), a bold job creation policy that incorporates some of the recommendations of EPI’s economists and policy analysts.

“Exactly the kind of bold response we need”
The legislation, which was introduced March 10, would keep more teachers in classrooms, more police officers on the beat, and make other investments in local communities around the country. Like the American Jobs Plan EPI issued late last year, Miller’s Local Jobs for America Act recognizes the importance of investing in schools, creating public service jobs, and providing fiscal relief to state and local governments to preserve existing jobs and create new ones. EPI Vice President Ross Eisenbrey issued a statement calling the Act “exactly the kind of bold response we need.”

By targeting state and local job creation, Miller’s bill also addresses some of the looming job losses that EPI has warned could result from a lack of policy action. Last November, EPI Policy Analyst Ethan Pollack said that without fiscal relief, state and local governments would be forced to make additional budget cuts, which would result in the loss of millions of jobs in the public and private sector over the next three years. His paper, Dire States, showed how fiscal relief could save jobs by helping to prevent large budget shortfalls.

A labor market stuck on pause
The Local Jobs for America Act was introduced amid new signs that aggressive policy action is needed to address the persistent jobs crisis. The Bureau of Labor Statistics (BLS) reported last week that 36,000 more jobs were lost in February as the overall unemployment rate remained unchanged at 9.7%. New data released earlier this week show that while the number of job openings is slowly improving, there are still more than five unemployed workers for every job opening.

Economist Heidi Shierholz, in her latest analysis of the unemployment data, described a labor market stuck on pause. She stressed that while unemployment remained unchanged, underemployment actually increased, to 16.8% in February from 16.5% in January. Shierholz also pointed out that many workers who had kept their jobs were working fewer hours, and that all those lost work hours added up to 2.8 million full-time jobs. In other words, while the United States currently needs 11.1 million jobs to return to pre-recession levels of employment, the “effective” jobs gap is a much larger 13.9 million, once lost work hours are factored in.

In addition, Algernon Austin, director of EPI’s Program on Race, Ethnicity, and the Economy, stressed that black and Hispanic workers remain particularly challenged to find a job. While unemployment stood at 8.8% for white workers in February, it was 12.4% for Hispanics and 15.8% for black workers. Austin discussed this problem of persistently high black unemployment on PBS NewsHour, where he noted that even highly educated blacks had much higher rates of joblessness than their white counterparts. EPI closely tracks unemployment by race, region, gender, and level of education on its Economy Track Web site.

EPI urges BLS to continue its International Labor Comparisons program
EPI has joined with numerous other researchers in calling for the Bureau of Labor Statistics (BLS) to continue its International Labor Comparisons program. The program, which has been targeted for elimination in the president’s fiscal 2011 budget, provides international comparisons of labor force productivity and hourly compensation, which have proved valuable in assessing the competitiveness of the U.S. manufacturing sector in an increasingly global economy. EPI uses this data in the international comparisons chapter of The State of Working America and in other reports. Economist Josh Bivens cited the BLS International Labor Comparisons in his 2009 paper, Squandering the Blue-Collar Advantage, where he refuted a popular argument that high wages and labor unions were to blame for the loss of U.S. manufacturing jobs. Rather, he showed that American manufacturing workers earn lower wages than many key U.S. trading partners, while also posting higher levels of productivity.

A petition urging the BLS to continue this important program is available online at http://www.ipetitions.com/petition/saveilc/.

Events
Currency manipulation can make imports artificially cheap and artificially inflate the prices of U.S. exports, putting U.S. manufacturers at a competitive disadvantage. On March 12, EPI International Economist Robert Scott will participate on a panel at the event Currency Manipulation: How Should the U.S. Respond? with Nobel-prize economist and New York Times columnist Paul Krugman and C. Fred Bergsten, director of the Petersen Institute for International Economics. The event will also feature other industry leaders including Leo Gerard, international president of the United Steel Workers and an EPI board member. The discussion begins at 9 a.m. in the East Room of the Mayflower Hotel (1127 Connecticut Ave. NW), and will also be broadcast via streaming video at http://www.epi.org/resources/event_20100312/.

EPI in the news
Heidi Shierholz was quoted widely in news stories discussing unemployment data and other labor market issues. USA Today quoted Shierholz discussing the problem of wage deterioration, while the National Journal featured a Q&A with her on the topic of a “jobless recovery.” When asked whether a major jobs bill would increase the deficit, she responded, “The biggest contributor to the increase in our deficits has been the recession. Since people have lost their jobs, we’ve seen seriously declining revenues…. In order to bring the deficit down, the first order of business is getting jobs.” Ethan Pollack was quoted in a CNBC story about the threat of additional state and local job cuts as Recovery Act funding dwindled.  “This is a completely unprecedented crisis,” Pollack said. “The budget cuts are going to get more and more severe.”

Visit EPI on Flickr
A collection of EPI images that tell the story of the jobs crisis and the economic downturn are now on Flickr. These charts and pictures are available for download at http://www.flickr.com/photos/economicpolicyinstitute.

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