Today is a national holiday celebrating labor, but a lot of former laborers are not celebrating. Sadly, on this Labor Day, almost 10% of working-age people in America are looking for work, but can't find it. The "Help Wanted" section of the newspaper is 1/10th the size it was 5 years ago, and for many folks looking for employment, the prospect of finding a job anytime soon is slim-to-none.
The Obama administration made addressing our broken health care system the first priority of its tenure in office, a decision that was understandable considering the substantial drag that health care costs places upon our economy, but while the health care industry employs large numbers of our work force, it has never been an industry that jump-starts hiring in a bad economic climate. Construction and manufacturing have been the traditional leaders in job creation, though often not simultaneously.
When World War II commenced, America was in the throes of a decade-long depression, but virtually overnight, the need to manufacture war armaments created tens of thousands of jobs and the road to economic recovery was greatly shortened. Manufacturing was the catalyst. In the early 90's, following the end of the first Iraq war, this country experienced a difficult recession and the new President, Bill Clinton, recognized that American manufacturing was not poised to lead an economic recovery. Clinton decided, and wisely so, that addressing America's deteriorating infra-structure (roads, bridges, schools, public buildings and parks) was the shortest way to economic recovery because it killed two birds with one stone – created jobs & repaired public infra-structure with the same dollar. Construction was the catalyst, and it ushered in the longest period of economic growth this country has ever experienced.
In today's economy, American manufacturing is not poised to lead an economic recovery because of its decade long-practice of exporting American jobs to foreign countries in the name of increasing bottom-line profits.
Republicans argue that lower business taxes will spur job creation in the manufacturing sector, but that claim lacks credibility when you consider that during the entire Bush Administration from 2001 to 2009, business taxes were decreasing and businesses responded by sending more and more jobs overseas. Even common sense weighs against the "lower business tax" argument. Businesses create jobs when there is an increased demand for their product. Without demand for products, businesses shrink their work force, not expand it. When demand for products increase, more workers can be hired. A reduction in business taxation does not create a demand for more products. Only an increase in the number of people working will fuel a demand for more products, and hence, an increase in hiring.
What about construction? Can it lead the way to economic recovery? It did in 1993. Can it do it again? While that's possible, there are different forces at work in today's economy that were not problems in 1993. Chiefly among them is the housing crisis. In 1993, new housing construction was down, but not on life-support, and the housing market in general was not in a state of collapse. Once infra-structure job creation took hold, advances in new home construction picked up and helped fuel the recovery. With today's housing market condition being what it is, little can be expected from it in terms of starting or fueling economic recovery. Simply treading water would be a plus.
Personally, I think government construction is still our best bet. It worked in 1993 and it still gives the taxpayer the best bang for their buck – job creation & infra-structure improvement with the same tax dollar.
Unfortunately, having spent whatever political capital he had on health care reform, the President currently finds himself fighting an uphill battle to convince the public to do what is necessary to create more jobs; that is, to increase federal spending to create jobs. To the public, that kind of spending is a pill too bitter to swallow. That's a shame, but that's politics.
What would I do? Well, I'd distribute fifty billion dollars in the form of direct emergency grants. Twenty-five million of those dollars would be immediately available to Habitat for Humanity programs to hire unemployed workers who were collecting unemployment compensation or had their benefits exhausted. I would require those workers be paid $15/hour and demand a 40-hour work week in return. That money would create millions jobs, help reduce dependency on public-financed housing and enhance the public image of a worthwhile program (Habitat for Humanity) that excels at promoting community involvement, a strong work ethic and the efficient and judicious use of funding.
The remaining twenty-five billion I would make available to state, county, schools and local governments to finance construction and/or improvements to highways, bridges and buildings. It worked in 1993. There's no reason why it can't work again.
There are millions of people in American anxious to be productive again. They deserve that chance. Otherwise, why are the rest of us celebrating?
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