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EconomicPolicyInstitute March 11, 2011

New data released last week show that, even after a full year of job creation, there is still a severe shortage of jobs, with five unemployed workers competing for every job opening. EPI’s research continues to explore the best policies for creating jobs.

Deficit hypocrisy

In a commentary published on EPI.org, policy analyst Andrew Fieldhouse says that the budget proposals put forth by Republican leadership in Congress have led to a “sudden pivot” from job creation to deficit reduction as the top economic priority, which is hard to square with last December’s sweeping and costly tax compromise. At a time when 14 million Americans are unemployed,  the budget passed by the Republican-controlled House of Representatives would substantially cut public investments, “leading to fewer teachers in classrooms, cops on the streets, and workers rebuilding our vital infrastructure,” Fieldhouse notes. And he highlights the hypocrisy in some of the policies promoted in the name of deficit reduction:

If we can afford tax cuts for the middle class and the wealthy and corporations offshoring jobs, we can afford to keep teachers in the classroom and cops on the street…. The prevailing sense of Congress seems to believe that deficits don’t matter when it comes to tax cuts for the already privileged, but do matter when it comes to spending. This is job-killing hypocrisy, and a textbook recipe for ”starving the beast” and hurting the middle class, not for creating jobs.

EPI’s job loss forecasts widely endorsed

Earlier this year, policy analyst Rebecca Thiess published a piece on EPI.org outlining how Republican budget proposals would result in the loss of about 800,000 jobs. That forecast has been echoed by leading economic forecasters including Moody’s Analytics Economist Mark Zandi as well as Goldman Sachs, which estimates the proposed cuts could produce as much as a two percent loss in economic growth.

Aligning immigration policy with labor market needs

On March 10, Economist Heidi Shierholz testified before the House Subcommittee on Immigration Policy and Enforcement about the job market for immigrant and native-born workers. Shierholz noted that while immigrants saw larger job losses than native-born workers in 2007 and 2008, they fared better than native-born workers in 2009 and 2010 and, so far in 2011, the two groups are in roughly the same place.

Shierholz said that these shifts in labor market conditions underscore the need for a more responsive immigration system that adapts to changing economic conditions. In one example cited, Shierholz noted that, in 2010, the unemployment rate in the construction sector was above 20%. “But the Department of Labor nevertheless certified thousands of H-2B visas for construction workers,” she said in her testimony. “This defies logic.”

The facts about student achievement

EPI Research Associate Richard Rothstein published a piece in the National Journal experts blog arguing that Bill Gates misinterpreted several facts about education and test scores in his recent Washington Post op-ed.  He notes that while Gates stated that student achievement has remained flat in the face of increased spending on education, results from the National Assessment of Educational Progress (NAEP) suggest otherwise. For example, Rothstein points out that “in fourth grade math, black students now have a higher average achievement than white students had when the assessments began.” Rothstein’s piece, also available on EPI.org, was cited widely and reprinted in full in the Washington Post’s Answer Sheet blog.

New EPI Board members

Mary Kay Henry

EPI recently elected six new board members including Mary Kay Henry (pictured). Henry is president of Service Employees International Union (SEIU), where she has worked since 1979. She was elected to the SEIU International Executive Board in 1996 and in 2004 she was elected to the role of SEIU International Executive Vice President, where she led efforts to build a stronger voice for health care workers. In 2009, Henry was named one of the nation’s “Top 25 Women in Healthcare” by Modern Healthcare. She is a member of the executive board of Families USA, a national nonprofit organization dedicated to the achievement of high-quality and affordable health care for all Americans. Watch for announcements of other new board members in upcoming newsletters.

Also in the news

NPR quoted Heidi Shierholz in a piece that examined the low rates of labor force participation and the potential impact of large numbers of workers returning to the labor force.

Reuters cited EPI data on jobs lost in the public sector.

Daily Kos cited EPI Economist Josh Bivens’ analysis in his new book, Failure by Design, in a story about the economic crisis and the ideological battle on how to respond.

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Adjective Quibble: The Long-Term Unemployment Rate is NOT “Sticky” or “Stubborn”
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