Economists have been predicting double digit unemployment rates for some time.   When the unwelcome milestone of 10.2 percent was reported for October, it was a sobering moment for political leaders.  It made the urgency of extending unemployment benefits all the more obvious (see UI article this issue), and Congress finally took that step.  But pressure is increasing to show more progress in getting people back to work.  In one high-profile response, President Obama announced on November 12 that he would convene a jobs summit meeting in December, bringing together business, labor, nonprofit sector, and other leaders to explore job creation strategies.  For the millions of Americans out of work, the need to turn around the job loss is increasingly urgent.
Advocates, economists, and policy-makers are starting to come together in support of important federal steps that can save and create jobs.  Drawing upon the expertise of its members, the Coalition on Human Needs has created a set of job creation principles that it will use to promote routes to jobs for low-income people.  Called If It’s Jobless, It’s Not A Recovery, the principles call for direct investment in public jobs that meet community needs, from school repair to retrofitting housing for energy efficiency to more child care and health care services.  The principles support increased federal aid to states, to prevent further state and local cuts in jobs and services.  They also seek training and supports so that low-income and vulnerable people can qualify for good jobs.  The overarching theme is that this recovery must be different from the experience of the past decade, in which low-income people lost ground and found opportunities shrinking.  That is not only important for poor people themselves; it is also essential to build a more secure and sustained prosperity for all in the years to come.

The economic recovery legislation (American Recovery and Reinvestment Act of 2009, or ARRA) has created or saved jobs.  A recent report by the Obama Administration pointed to 640,000 jobs so far, but that is only a partial count of the jobs created.  It counts hiring directly as a result of contracts for new projects, but does not count the jobs that are added because of more spending by low-income people made possible by unemployment or food stamps benefits.  Although ARRA has reduced the severity of the recession, more is needed.

Many are agreed that central to reversing the grim job statistics is a continuation of aid to states and localities.  The economic recovery legislation included $140 billion in aid to states.  Included in this funding is $87 billion for expanded federal help in covering Medicaid costs, which are growing as the recession slashes the incomes of millions of families and making many more eligible.  Other funds are in the form of grants used for education and many other state services.  Despite this substantial help, states’ revenues have been driven so low by the recession that state governments are still making severe cuts.  But there is no question that the loss in services and jobs would have been far worse without the federal help.  According to the Center on Budget and Policy Priorities, the ARRA aid helped states to close 30-40 percent of their budget gaps.  However, ARRA aid to states is set to expire on December 31, 2010.  The fiscal picture is not expected to improve for states for more than a year beyond the expiration date.  If the federal aid stops precipitously, it will force far worse cuts and create a drag on the economy projected to result in the loss of another 900,000 jobs, according to the Center on Budget and Policy Priorities analysis. Advocates and states are seeking a continuation of the aid, perhaps with a gradual phase-out.  The first important step towards this goal was included in the health care reform legislation adopted by the House of Representatives.  That legislation includes 6 more months of higher federal contributions towards Medicaid costs.  Since it is clear the economy will not have turned around in as little as six months after the ARRA aid would otherwise expire, advocates will work for more federal help.

Apart from state aid, the specific policies Congress may be persuaded to adopt are not yet clear.  Members of Congress and the Administration are torn between recognizing that more action is needed and fear of further increasing the deficit.  Economists have pointed out that spending now to create jobs is an investment that will pay off in economic growth and increased revenues that will shrink the deficit.  Initiatives to hire workers to rebuild roads and schools, to provide health services, or improve energy efficiency are examples of investments that will lead to economic growth and better permanent jobs.  A  shared growth strategy to reverse decades of shrinking opportunity will target projects in low-income communities, rural and urban alike, and will help youth, parents, people with disabilities, those with limited English proficiency, racial minorities, women, and others whose low skills prevents them from being as productive as our future economic growth demands.

Experts including the Economic Policy Institute, Service Employees International Union, and the Center for Community Change are among those developing proposals for direct expenditures on public jobs.  The proposals vary, but agree on the need for multi-billion dollar investments to hire perhaps a million or more workers.  Communities with high levels of unemployment or poverty would get preference for public works projects.  There would be protections against displacing permanent employees with temporary workers.  Funding would flow to localities or states, and would meet needs for infrastructure repair, weatherization of public buildings, health and social services, etc.  Workers hired would gain training and experience and would be more likely to secure permanent employment as a result.

Many initiatives could target jobs to low-income people, from summer jobs for youth to transitional jobs with added supports for people with serious barriers to employment to training and hiring public housing residents to renovate public housing units.  Advocates will work in Congress to identify possible opportunities for jobs funding to be included in legislation likely to move forward in the coming weeks and months.  It will not be easy.

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