Job One

The President's Job's Initiative Doesn't Measure Up

OurFuture.org Staff — Thu, 10 Dec 2009 11:38:17 -0500

Measure Dignity, Not Growth

Terrance Heath — Thu, 10 Dec 2009 11:13:38 -0500

Digging Out The Allentowns

Tom Croft — Wed, 09 Dec 2009 11:41:27 -0500

Well, we're living here in Allentown. And they're closing all the factories down.

—"Allentown" (1982), by Billy Joel.

President Obama announced a new series of jobs initiatives Tuesday while at the Brookings Institute. (“Recovery Act Lite”?) His announcement came a few days after visiting Allentown, Pa., as the first stop on a listening tour on the economy. And the listening tour came a few days after the “White House Summit on Jobs and Economic Growth,” which brought together business, labor and policy leaders to wrestle down some solutions to the nation’s economic crisis and unemployment rate spike to double-digit territory.

The President committed to new jobs-creation programs, business tax cuts and ramped-up business loan programs, along with new infrastructure funding and help for communities. He pledged to recycle some of the repaid TARP funds to jump-start the banking credit system, which has been seriously stalled.

It’s good to see the renewed efforts, and some of these ideas may work well. We desperately need all the help we can get. But let’s return for a moment to Allentown.

Remember Allentown? It was memorialized by the Billy Joel song about the shutdown of nearby Bethlehem Steel. During the Town Hall meeting and company visits, we heard some inspirational stories of local entrepreneurs, about the increase in federal Small Business Administration funding, and how Allentown should be able to cash in on the green-jobs boom.

In researching this story, I remembered that the Bethlehem Steel Plant had been razed to make way for a casino. I wasn’t surprised. We also have a new casino in Pittsburgh (my home town), built on an old industrial waterfront site (and despite the hype of the recent G-20 event, the City of Pittsburgh is still bankrupt). When I read that the Las Vegas casino owners in Bethlehem had problems finding enough steel to build the new gambling site—well, that’s just another day in Allentown. Or Homestead…Youngstown …Flint…and hundreds of auto-belt rust-towns and now Florida, Arizona and California boom towns gone bust.

The real economic pain of Allentown and Bethlehem cannot be solved by heartwarming vignettes. The Lehigh Valley’s unemployment rate hovers near 10 percent, almost double a year ago, the fourth highest in Pennsylvania. Like innumerable hometowns in the commonwealth and beyond to Midwest-Great Lakes towns, we need significant, long-term federal investments to recover. We need banks to begin lending money again to local businesses, especially manufacturing firms. We need advanced manufacturing jobs if we are ever going to realize the green boom.

Casinos might be fun to visit (hey, I love the comps), but the jobs don’t replace hard industries that have been lost. Service, financial, retail and hospitality jobs just camouflage the sorry reality that vast waves of our money have actually disappeared into a dark hole called financialization. Financialization led to the herding of our savings and assets into short-term, risky bets that redlined entire regions, crowded out critical industry investments, and, ultimately, contributed to the market crash.

If we can’t find enough steel to build casinos today, how in the world will we build the green jobs industries of the future? Beth Steel was originally built to forge the steel for the nation’s rail systems. Where will we get the steel to build the Obama Administration’s proposed new high-speed rail system, the new wind farms, the new green buildings?

I’m all over the President’s Main Street Tour; I hope it continues for the next seven years. We should remember that we have not had a serious effort to rebuild our industrial communities since the roof began caving in around the time of the Joel song, circa the Reagan decade. So, we should support the new administration and Congress in many of these new initiatives. But it’s going to take more money still, and then all the cavalry we can muster.

Fortunately, there’s one source of money that we, the people, actually have a say over. We own the institutional investments markets, vast pools of around $24 trillion before the crash. While it’s our money— in pension and savings plans, insurance companies, endowments, foundations and deposits—we don’t control how it’s invested. For years, it’s been churning away, hollowing our hometowns. But we—steelworkers and teachers, insurance holders and foundation chiefs—could change that, with help from the president and Congress (and that includes re-regulating the financial markets).

For the past three years, I’ve been meeting innovative, successful investment managers across the U.S. and Canada who’ve done well by creating hundreds of thousands of good-paying, mostly union jobs and similar numbers of affordable housing units—and investing in the green economy. They have capitalized $30 billion-$35 billion in ready-to-invest assets, primarily through union and public pension fund investments. With some federal funding guarantees and partnerships, we could see these investors and dozens more bring a much larger, at-scale cavalry for economic recovery.

These responsible investment funds have invested in U.S. portfolio companies to build them up, not tear them down. They’ve restructured companies in trouble, stabilizing them and saving jobs, not stripping and flipping. They’ve increasingly invested in green buildings and sustainable housing, not subprime mortgage scams. They’ve expanded renewable energy and efficient transportation firms, including builders of windmills and hybrid buses, leading to green-collar jobs (often with union wages and benefits). They’ve invested large sums, prudently and profitably, for the long term. They’ve aligned their investments with the long-term interests of their beneficiaries.

Yes, we need a lot of new federal dollars, but we also need to marshal workers’ resources—our own money—for the long run. We can’t revive our hometowns via the “small is beautiful” mantra, nor the 1990’s Clinton free-trade delusion. It’s time real money was put to work to rebuild our communities, industry by industry, block by block, brick by brick.

We have the capacity to reconstruct our infrastructure, reinvigorate our cities and create that hoped-for green-jobs future. But first, together, we have to reclaim control of our money.

Tom Croft, an international expert on innovative capital strategies and Director of Pennsylvania’s Steel Valley Authority, is the author of "Up From Wall Street: The Responsible Investment Alternative" (Cosimo Books, 2009).

Size Matters, Particularly When It Comes To Jobs

Robert Borosage — Wed, 09 Dec 2009 10:30:30 -0500

President Obama is sensibly focused on jobs, unveiling a new initiative Tuesday in the wake of last week's White House jobs summit. Elements included everything from new infrastructure spending to "cash for caulkers," tax breaks for weatherizing homes, as well as aid to cities, states and the unemployed. The president suggested that the $200 billion recouped from the banks in the TARP program could be used to both to reduce the deficit and help finance the initiative.

The president's speech was masterful. But what was left out of the speech was, in many ways, more telling that what was included.

Size Matters

The president made no mention of the size of his program. Reports range from some $70 billion to $200 billion. This leaves the House leadership with the responsibility to insure the program is big enough to do the job.

And they should think big. We've lost over 7 million jobs; 15 million are unemployed. States and localities are facing staggering deficits over the next year, with an estimated 900,000 jobs at risk. Foreclosures continue. Consumers and businesses are cutting back. In fact, for the all the talk of deficits, the nation actually experienced no increase in total debt over last year, as the rising federal deficit was more than matched by the reduced borrowing of consumers and businesses.

To return to the levels of employment needed to generate rising incomes, we'll need 250,000 new jobs a month for five years. So go big. $100 billion or more for states and localities; $100 billion for extending unemployment and food stamps for the victims, $50 billion a year for infrastructure projects, $40 billion a year to create a million public service jobs ... Congress should be considering a several-hundred-billion-dollar program over two years.

The first recovery plan staved off a far worse collapse. And the latest monthly report suggests that we're finally hiring nearly as many people as we're firing (due to rising public sector employment). But zero job growth is not a victory. It takes over 125,000 new jobs a month simply to keep up with population growth. Economist Jamie Galbraith notes that to return to the levels of employment needed to generate rising incomes, we'll need 250,000 new jobs a month for five years.

So go big. $100 billion or more for states and localities; $100 billion for extending unemployment and food stamps for the victims, $50 billion a year for infrastructure projects, $40 billion a year to create a million public service jobs, plus opening up loans to small- and medium-sized businesses, plus the inevitable tax cuts and credits—to seniors, for weatherization, for small businesses. Congress should be considering, as Paul Krugman suggests, a several-hundred-billion-dollar program over two years.

This will elicit screeds about deficit spending, but the president has this right. If you want to get the deficit down, the first priority is to get people working, earning money, paying taxes, and not drawing on government aid. In his words,

Now, there are those who claim we have to choose between paying down our deficits on the one hand, and investing in job creation and economic growth on the other. This is a false choice. Ensuring that economic growth and job creation are strong and sustained is critical to ensuring that we are increasing revenues and decreasing spending on things like unemployment insurance so that our deficits will start coming down...

Once people are back to work and business is beginning to invest, we can deal with the remaining deficits. And most of the red ink projected over time is caused by our broken health care system and its soaring costs that must get fixed.

Size matters, but not to the party of no. Republicans will howl about deficits whether Democrats spend $7 million dollars or $700 billion. People don't like deficits, but ask them to choose—jobs programs or deficit reduction—and large majority choose the former. The key is to put people to work. The last recovery program helped, but it was too small. And Democrats are paying a not undeserved price for an economic program that is producing million-dollar bonuses on Wall Street but too few jobs on Main Street. It is time to be bold, not cautious, about jobs.

Why not public service?

Obama's agenda included many of the items detailed by progressives with one glaring exception: there was no mention of direct public service jobs. No modern day Works Progress Administration that Roosevelt created; no Comprehensive Employment and Training Program that the last liberal president—Richard Nixon—championed.

With long-term unemployment at record levels, and joblessness among young people in cities simply devastating, progressives in the Congress should push hard for direct public service jobs—both an expansion of existing programs like AmericaCorps, and the creation of a new Urban and Green Corps to put people directly to work on work that needs to be done. For example, legions could be gainfully employed in taking down or fixing up abandoned houses, turning empty lots into mini-parks, and so on. They would gain the benefits of work, learn skills and the society would benefit. They could be paid at prevailing wage scales to avoid undermining current public workers.

Ideas Matter

In his speech, the president returned to his vital theme, that we can't go back to the old economy that was based on booms and busts, finance capturing 40 percent of the profits, people and the nation living beyond their means, racking up more and more debt. He took a shot at Republicans who ran up deficits with wars abroad and top-end tax cuts at home when the economy was growing and now object to them to help people survive after they drove us off the cliff. With Republicans trying to pin the economic mess on Obama, it is vital that the president take them on.

But here's how the president described why we got in that fix:

In the end, the economic crisis of the past year was not just the result of weaknesses in our economy. It was also the result of weaknesses in our political system, because for decades, too many in Washington put off the hard decisions. For decades, we've watched as efforts to solve tough problems have fallen prey to the bitterness of partisanship, to prosaic concerns of politics, to ever-quickening news cycles, to endless campaigns focused on scoring points instead of meeting our common challenges.

Well. No doubt Washington is petty and partisan, with endless campaigns. But in fact, it wasn't "putting off hard decisions" that drove us off the cliff. It was conservative ideology implemented into policy. George Bush got things done; they just turned out to be ruinous. Top-end tax cuts squandered budget surpluses, and contributed to Gilded-Age inequality. Scorn for regulation and government gave bankers multimillion-dollar personal incentives to gamble recklessly, while gutting enforcement of everything from clean water to labor laws. "Free trade" policies, defined by multinational banks and corporations - shipped good jobs abroad, while providing cheap money to fuel the housing bubble. Under Bush, the special interests ruled, plundering taxpayers for subsidies for big oil, for PhRMA, for agribusiness. Privatization opened up new areas for plunder, with Halliburton providing the poster child. Such fundamental challenges as soaring health care costs, catastrophic climate change and a disintegrating infrastructure were ignored in the confidence that the market would eventually work things out. It wasn't gridlock that drove us off the cliff. It was, as Alan Greenspan admitted, an ideology that was simply wrong. It wasn't inaction that brought us to grief. It was action going in the wrong direction.

This isn't an academic exercise. Americans will be given a choice in the elections next year. Go back to the old policies that drove us into this mess, or stay on the course Obama has charted to dig out of it. Republicans, increasingly purged of any moderate voices, will blame the economy on Obama, and renew their old mantra of smaller government, lower taxes and less regulation. They won't accuse Obama of inaction; they'll accuse him of going the wrong way. Democrats will have to remind people of exactly what put us into this hole. It wasn't gridlock. It was conservative's having their way and bringing us down.

There is no person better able to make this argument than the president. And he should be pounding on it, just as he focuses on jobs, from this day forward.

The New Working Reality

OurFuture.org Staff — Mon, 07 Dec 2009 10:49:54 -0500

Massive Jobs Program Only Hope for Prosperity

OurFuture.org Staff — Mon, 07 Dec 2009 10:46:53 -0500

The Urgent Need to Revitalize U.S. Manufacturing

Scott Paul — Fri, 04 Dec 2009 10:48:13 -0500

Labor and business leaders agree: we must revitalize manufacturing to get our economy back on track. Let’s hope the Obama Administration and Congress recognize this, as well.

The President is convening a jobs summit at a critical time for the nation's factory workers. Our manufacturing sector has lost more than 5 million jobs in the past decade and 51,000 plants have closed. According to the Bureau of Labor Statistics, the manufacturing sector experienced a staggering 566 "mass layoff events" in October 2009 alone, leaving nearly 70,000 new claimants seeking unemployment benefits.

On Wednesday evening, CNBC broadcast an exceptional “Meeting of the Minds” town hall meeting on manufacturing, taped at Carnegie Mellon University in Pittsburgh. Highlights of the discussion are available here.

Much of the focus was on how to keep manufacturing in the U.S., and in particular how we can ensure that our R&D and technological innovation translate into jobs in the U.S. The best ideas from the CNBC show participants—business leaders such as GE’s Jeff Immelt, Ford’s Bill Ford, and Nucor’s Dan DiMicco, as well as the United Steelworkers’ Leo Gerard, Labor Secretary Hilda Solis, and John Engler of the National Association of Manufacturers—can form the framework for a good jobs policy:

Balance our Trade Relationship with China. China's protectionist policies have been a leading culprit of manufacturing job loss in the U.S. Subsidized and dumped imports, artificially low currency, and lax environmental standards have put our workers and companies at a significant disadvantage. The U.S. trade deficit swelled to $36.5 billion in September alone, but more shocking is the fact that the non-oil goods trade deficit with China has peaked at 83% of the overall deficit.

Invest in Infrastructure. A January 2009 AAM report (link here) shows that roughly 18,000 new jobs would be created for every $1 billion in new infrastructure spending on our nation's transportation, energy, water systems, and public schools. In order to adequately meet the economy's assessed infrastructure needs over the next five years, the report estimates that a minimum of $87 billion per year is needed, of which $54 billion would come from the public and $33 billion would be private investment.

Buy America. Studies show that manufacturing employment gains from infrastructure investment increase by 33% when the amount of U.S.-made material inputs are increased by including a strong Buy America provision. Full transparency of the waiver process should also be implemented to increase public scrutiny and to ensure that domestic manufacturers can step in when requests for waivers are posted.

Increase Access to Credit. The lingering credit crunch continues to have an adverse effect on manufacturers, especially small- and medium-sized firms that have historically been responsible for the bulk of job creation. Access to capital is also critically important for companies seeking to meet the demand for clean energy manufacturing, such as wind turbines and solar panels.

Enhance Green Job Creation in the U.S. The recent announcement of a massive wind farm project in Texas is raising red flags because its developers plan to manufacture the high-value wind turbines in China. As a result, taxpayer dollars from the $787 billion Recovery Act will be used to create thousands of jobs in Shenyang, China. Properly-designed energy tax incentives must be employed that require manufacturing to be used in towns across America where plants are idled and workers are jobless.

The No-Sense Jobs Plan

OurFuture.org Staff — Fri, 04 Dec 2009 10:21:18 -0500

The American Worker: an Endangered Species

OurFuture.org Staff — Fri, 04 Dec 2009 10:15:28 -0500

Obama Jobs Summit: Leo Gerard On What's Next

Isaiah J. Poole — Thu, 03 Dec 2009 18:46:42 -0500

Leo Gerard, president of the United Steelworkers union, analyzes the White House summit on jobs December 3, where he was one of the labor participants. He says in this interview that he was buoyed by the good ideas that were presented at the summit, and praises Obama for using the summit to put a focus on creating jobs. Now, he says, Congress and the administration must act to address the infrastructure, trade, training and manufacturing policy issues that must be tackled to produce jobs in both the short and long term.