EPI News

A groundswell of support for federal action on jobs creation

The Labor Department earlier this month reported an official unemployment rate for September of 9.8%, suggesting that about one in 10 American workers is out of work. But even that figure, the highest unemployment rate in a generation, masks the extent to which joblessness has devastated American families.

An analysis of the latest jobs data by EPI economist Heidi Shierholz found that September marked the 21st consecutive month of job loss, making this the longest losing streak in 70 years, and costing the country 7.2 million jobs so far. Considering the additional jobs needed to keep up with population growth, the country now needs 9.9 million jobs to return to a pre-recession level of employment.

Recession is personal for one in four Americans
On September 30, EPI released a new survey showing that almost one in four families have suffered a job loss over the past year, and 44% have suffered either the loss of a job or a reduction in wages. The survey, Tracking the Recovery: Voters’ Views on the Recession, Jobs, and the Deficit, was conducted for EPI by Hart Research Associates, which polled 802 registered voters in mid-September. Asked to name the most important economic problem facing the country, 53% of those surveyed listed unemployment and a lack of jobs, compared with 27% who cited the federal budget deficit. An overwhelming majority of those surveyed—81%—said the Obama administration has still not done enough to deal with the unemployment crisis. Some 87% of voters said they support a major job creation credit for U.S. businesses and 71% support putting unemployed people to work at government-funded public service jobs.

Making new jobs creation a priority
Also on September 30, EPI hosted Generating a Robust Recovery, where a panel of economists and lawmakers elaborated on the need to do more to create jobs and strengthen the social safety net. In a keynote address, Rosa DeLauro, U.S. Congresswoman from Connecticut, said the widespread job loss and mounting poverty levels had left the country at risk of having “a lost generation of American children.” Geoffrey Garin, president of Hart Research Associates, which conducted the Tracking the Recovery survey, also pointed to a disconnect between Washington, where many policy makers continue to see deficit reduction as the top economic priority, and ordinary people throughout the country, who want more jobs. Considering the staggering level of job loss, Garin said he found it “inconceivable” that lawmakers would make fixing the budget deficit a priority “without first getting people back to work.”

Krugman makes the case for more public investment
Other speakers at EPI’s conference offered some perspective on the federal deficit, in the context of the need for more public investment from the federal government. “The idea that there is a tradeoff between doing more today and having more later is not true,” said Paul Krugman, the Nobel Prize–winning economist and New York Times columnist. Krugman argued that investments made today to help create jobs and strengthen the social safety net would be good for the economy both now and in the future. Although he said that the $787 billion Recovery Act passed earlier this year had succeeded in creating new jobs and preventing the loss of others, Krugman stressed that the stimulus package was not large enough to deal with such a steep downturn.

While the $787 billion of stimulus spending may have seemed like a massive amount when the Recovery Act was passed earlier this year, many economists, including Krugman, believe it was insufficient. “We did somewhere between a third and a fifth of what we needed to do,” said J. Bradford DeLong, professor of economics at the University of California at Berkeley, who also spoke on the panel at EPI. That estimate was consistent with other findings in the Tracking the Recovery survey. While most of those surveyed seemed to appreciate that the Recovery Act had provided some needed assistance, two-thirds of those surveyed said that it had helped a little, rather than a lot.

The panel, which was moderated by Washington Post columnist Steven Pearlstein, also featured EPI Research and Policy Director John Irons, who offered more insight on the cost of doing nothing. Irons’ latest paper, Economic Scarring, outlines some of the long-term consequences of even short-lived recessions, including increased poverty and reduced educational attainment, private investment, and entrepreneurial activity.

Redesigning teacher pay
A new book published by EPI examines the longstanding formula that determines teacher pay and makes a case for a new system. In Redesigning Teacher Pay: A System for the Next Generation of Educators, Susan Moore Johnson and John Papay of the Harvard Graduate School of Education propose aligning teacher pay with broader educational goals such as improving educational outcomes and attracting and retaining high-quality teachers. The authors argue that the existing system of pay-for-performance has been largely unsuccessful in meeting those goals and that a new system is needed to meet the challenges of education in the 21st century.

On Oct. 1, EPI hosted a panel discussion on teacher pay. Rob Weil of the American Federation of Teachers made the case for a method of compensation that was transparent and acceptable to the teachers. Also at the event, Tom Toch, executive director of the Association of Independent Schools of Greater Washington and a nationally known expert on education issues, discussed research showing a preference among teachers to work at schools where they were well supported rather than just paid well.