Job creation took a U-turn in May, sparking proposals to do something — anything — to get employment moving in the right direction again.
Among the suggestions Friday from politicians, economists, business leaders and regular folks:•Cut taxes.•Send federal stimulus aid to the states.•Freeze regulations on small business.•Cut government spending.•Pass international trade agreements to expand export markets.•Create a federal jobs program like the ones in the 1930s.Those suggestions — many at direct odds — came in a flurry as people reacted to the government’s report of a net job gain of a mere 54,000 last month.The Labor Department’s report stunned market analysts. Even their pared-down expectations of 100,000 new jobs in May — less than half of April and March gains — weren’t met. Furthermore, 39,000 new jobs originally reported for March and April were erased by May revisions.Overall, the national unemployment rate edged up slightly to 9.1 percent from 9 percent. It’s a befuddling, nearly jobless 2-year-old recovery that isn’t behaving like previous rebounds from recessions. Analysts said that the Federal Reserve, having pushed interest rates to near zero to encourage borrowing, had done nearly all it could to stimulate economic growth.Yet the nation still has a jobs deficit of about 11 million compared with what it had before the recession and what it should have now to accommodate those who want to work.In a visit Friday to a Chrysler plant in Toledo, Ohio, President Barack Obama emphasized the turnaround in the U.S. auto industry, saying the government recouped more money than expected from its investment two years ago in Chrysler and General Motors.The president didn’t directly address the lackluster jobs report or offer a specific job-generating plan.Amber McGuire, a 25-year-old job hunter from Raytown, laughed when asked what she thought would create jobs. “Get rid of the computer?” she finally proposed.She knew it was silly. But, she noted, “robots putting together things in the manufacturing plants is good for progress, but it’s bad when technology takes the place of people who had those jobs.”McGuire’s previous job was as a waitress. Now she’s looking for “pretty much anything, really.”Like McGuire, about 13.9 million Americans — including 6.2 million searching for more than six months — want paychecks, not talk.But proposals precede solutions, so The Star on Friday sought opinions from politicians, economists and industry leaders. Each was asked: What should be done to create jobs?Economist Chris Kuehl at Armada Corporate Intelligence said in an economic briefing that “the fact is that jobs are provided to people when a business has a reason to hire and expand, and that means the business is growing. Job growth is an outgrowth of business growth.”But growth has stuttered in the consumer-driven U.S. economy, battered by the collapse of the housing market, a tentative stock market recovery from near disaster, continued job cuts, stagnant wages and higher costs for fuel, food and health care.Al Angrisani, a former assistant labor secretary under President Ronald Reagan, said the “systemic solution” supplied in the 1980s was needed now: a freeze on regulations for small businesses.“In the last two years we’ve spent $800 billion on developing infrastructure and green jobs,” Angrisani observed. “I believe you’d find out the money is not getting where it belongs.”He said that the time and money spent complying with federal, state and local regulations were the biggest drains on business confidence. The federal government instead should focus its funds on grants to states for job creation — and then shut off the funding spigot if jobs aren’t created, Angrisani said.Heidi Shierholz, economist at the Economic Policy Institute, said jobs would come with a three-pronged approach:•First, a dollar policy that makes the U.S. greenback weaker, thus making U.S. exports cheaper, increasing their demand and generating domestic jobs.•Second, continuing the Fed’s low-interest-rate monetary policy that encourages borrowing.•Third, fiscal policy that expands on the 2009 Recovery Act by putting jobless benefits in the hands of those who will spend the money immediately, and providing relief to budget-strapped states by channeling funds to infrastructure work projects — perhaps similar to the Works Progress Administration program of the 1930s.Republicans on Capitol Hill, led by House Speaker John Boehner of Ohio, said regulatory easing was part of the job-creation solution.Boehner’s plan calls for tax cuts and holding small-business tax rates to no more than 25 percent. The Republican plan for job creation also includes increased domestic production of energy and paring federal government spending.Chad Moutray, chief economist for the National Association of Manufacturers, echoed the need to open up new trade markets, especially with South Korea, Colombia and Panama.“We also want to make sure that U.S. corporate tax rates are competitive with the rest of the world,” Moutray said. “We want rates to be brought down to be more competitive and the R&D (research and development) tax credit to be made permanent. We don’t need government handouts to create jobs. We need a favorable tax and regulatory environment.” The Associated General Contractors of America also called for job creation through regulatory easing, lower business taxes and trade agreements. “Small businesses aren’t going to know what their tax rate is going to be come January 1st,” said Stephen Sandherr, the association’s chief executive. “We need to provide certainty so they know what percentage of their income is going to the IRS.”A different take on tax reform to encourage job formation came from the group United for a Fair Economy, which said that taxing high-income earners at the same rate as low-income earners would solve state budget crises. In California, for example, a Fair Economy study said $39 billion in new revenue could fill state coffers if the “regressive tax structures” were changed.Christine Riordan, policy analyst for the National Employment Law Project, cited at least four job-stimulus ideas, led by keeping unemployment funds intact in the states so that money circulates in the economy.Riordan said the 2009 Recovery Act had the right idea in sending funds to state and local governments to “stop their bleeding.” Also, federal investment in infrastructure projects, green jobs, weatherization programs and subsidization of low-income employment programs also should continue.Those priorities were echoed by a spokesman for the AFL-CIO. But “the most immediate and effective way to create jobs and be competitive in the 21st century is to invest in our nation’s crumbling infrastructure system that faces a $2.2 trillion deficit,” said Josh Bernstein, advocating job programs to fix roads, bridges and schools. Reaction to the May employment report also included some very specific ideas.Doug Kantor, counsel to the Merchants Payments Coalition, said a Senate bill delaying new limits on debit-card “swipe” fees “would kill more than 100,000 jobs that would otherwise be created under the Federal Reserve’s new swipe-fee rules.”The Fed’s new rules, scheduled to take effect July 21, would limit the fee banks can charge merchants for debit-card processing at 12 cents per transaction. Banks and credit card companies opposed the Fed’s rules, and the Senate bill would delay their implementation.Noting that the retail sector lost 8,500 jobs in May, Kantor said the Fed’s swipe-fee cap would allow merchants to keep more money so they could “create thousands of jobs,” but “delaying and derailing the final rule will cost Main Street $1 billion per month and thousands of much-needed small-business jobs.”Job market losers and gainers These sectors lost jobs: •Local government-28,000•Retail trade-8,500•Leisure and hospitality-6,000•Manufacturing-5,000•Construction-2,000•State government-2,000•Information-1,000These sectors gained jobs: •Professional and business services+44,000•Health care+17,400•Transportation and warehousing+8,000•Mining+7,000•Educational +6,600•Financial activities+3,000•Wholesale trade+3,000•Federal government+1,000Read more Workplace
Posted on Fri, Jun. 03, 2011 11:00 PM
Share
Email
Print
Email Story
close
tool goes here
As unemployment rate rises, no shortage of ideas for creating jobs
More News
To reach Diane Stafford, call 816-234-4359 or send email to stafford@kcstar.com. Source: U.S. Bureau of Labor Statistics, Employment Situation report, May 2011
