Stimulus needed: How to create jobs
Some rights reserved by Senator Mark Warner.Millions of people remain unemployed in the wake of the recession. Among workers age 25 to 54, the U.S. economy has restored less than one fifth of the jobs lost during the recession of 2007–2009. Long-term unemployed and discouraged workers now make up 5 percent of the U.S. workforce. Long-term unemployed people who are 50 or older have a less than one in ten chance of finding work in the next three months. The longer they remain unemployed the less likely they will ever be employed again.
The employment situation in the United States is a human crisis. Unemployed people face the stigma of unemployment and the erosion of job skills in addition to loss of income. And unemployment affects almost every part of the population. Older workers are being forced into early retirement for which they do not have adequate financial resources or health insurance. People unemployed mid-career see death rates increase by 10 to 15 percent and divorce rates by 13 to 18 percent. Minor children of parents who lose jobs suffer a 9 percent reduction in their future earnings. Young workers either remain unemployed or accept lower-level jobs and lower wages, indefinitely delaying household formation, marriage and childbearing. Those who graduate from college during a period of low employment can expect a permanent 1 to 20 percent reduction in earnings.
These statistics should be a wake-up call. But the Obama administration, Congress and the Federal Reserve have all responded largely as though unemployment is solely the responsibility of the unemployed. Earlier this year, Congress reduced extended unemployment benefits from 99 to 79 weeks. The chairman of Obama’s Council of Economic Advisers, Alan Krueger, even went so far as to suggest that high unemployment figures were the result of unemployment benefits. Despite an endless supply of rhetoric about jobs, all levels of the federal government have moved slowly or not at all to bring about actual changes in monetary and fiscal policies that would stimulate the economy.
