Focus on jobs
Only 11,000 jobs were cut in November, far fewer than analysts anticipated, and the official unemployment rate dropped from 10.2 percent to 10 percent.
That was the good news Friday as President Barack Obama began a multi-city jobs tour in Allentown, Pa.
The bad news is that one in 10 Americans is still officially unemployed and a third of the unemployed have been without work for six months or more. Also, when you include those who have stopped searching for work or are working only part time because they can’t find full-time work, the effective “underemployment” rate is 17.5 percent, according to economist Robert Samuelson.
Any true economic recovery must change those numbers. When more than one in six Americans is out of work or not working as much as they need to make ends meet, creating new jobs has got to be a top priority.
Obama’s jobs forum Thursday with top business leaders was a welcome recognition of that fact. So is his jobs tour.
But that recognition has yet to translate into a solid plan for adding jobs, although several possibilities have been bandied about.
Democrats in Congress are talking of funding job programs by using the $70 billion in unused money from last year’s bank bailouts — the Troubled Assets Relief Program, or TARP. That money isn’t actually sitting in a bank account somewhere, waiting to be spent. Using it will mean adding to the federal deficit. But budget forecasters already have included it in their projections for future deficits. And there are several worthwhile ways to use it and money that some of the banks are now repaying.
First, efforts already are under way to extend unemployment benefits and health insurance availability to those out of work. That makes sense because, without the additional assistance, these workers are likely to end up on welfare rolls, potentially costing taxpayers even more money.
Tax credits for businesses that hire more workers also are a reasonable idea. Obama said Thursday he is considering such a proposal. The tax credits may reduce tax revenue in the short term, but they will boost revenue and economic stability in the long run.
The president is reportedly considering a program that would provide cash incentives to help people pay for energy conservation improvements to their homes. Such a program could aid the construction sector and building-materials retailers. Furthermore, boosting the energy efficiency of homes is one of the best means of reducing our energy consumption and carbon dioxide emissions. But if it approves the plan, Congress must make sure the money isn’t used primarily for cosmetic improvements with little real energy savings.
Some Democrats and their allies also are proposing a new stimulus bill to create more public-sector jobs. That’s not a bad idea in itself, but we oppose their plan to pay for it by creating a new sales tax on stock transactions. New taxes will only slow the recovery
Also, we agree with Obama: To sustain the economic recovery now, new jobs must come primarily from private businesses.
To that end, whatever proposals Obama puts on the table in the next few days, they must encourage the private sector to hire more people. That’s the best way to ensure that the modestly good job news of November continues to improve in 2010.