EPI President Lawrence Mishel told a Senate hearing on January 21 that unemployment was a “dire emergency” that required action “on a scale that can really make a difference.”
In addition to the more than 15 million Americans who are unemployed, Mishel said that the labor force has shrunk over the course of the recession, resulting in 3.5 million “missing workers.” While discouraged workers frequently drop out of the labor force during tight job markets, Mishel said many of them are likely to return to the work force as the economy recovers, which could serve to drive the unemployment rate higher even after job growth resumes this spring. Bringing nationwide unemployment down from its current level of 10%, he said, is further challenged by the fact that the country needs to create 100,000 jobs every month just to keep up with population growth.
Mishel, who outlined the five-part strategy to create millions of jobs that is contained in EPI’s American Jobs Plan, said aggressive policy action will be required just to get unemployment down to 9.5% by the end of the year. EPI recommends about $400 billion in federal investments to create jobs, including spending on safety net programs such as extended unemployment insurance for the long-term unemployed and subsidized COBRA health insurance, which also serve to preserve existing jobs and create new ones.
“We’re not going to have many more chances to get things going,” said Mishel, who stressed that many economists remained concerned about a double-digit recession. “We have to do whatever we can.”