A Liberal Agenda Without Full Employment?

[HiPointDem]

There were numerous news stories and columns touting the liberal agenda that President Obama put forward in his second inaugural address yesterday.... While the speech certainly hit on several issues that have historically been important to liberals, the failure to mention full employment was a major omission.

The fact that the economy is still more than 9 million jobs below its trend growth path implies enormous suffering. Not only are millions of people unnecessarily unemployed or underemployed, high levels of unemployment mean that most workers lack bargaining power. As a result they are unable to raise their wages and get their share of productivity growth. This means that income is likely to continue to be redistributed upward.

There are not easy political paths to full employment at this point. Government stimulus (i.e. larger deficits) is the most obvious path, but that seems out of the question in a context where deficit reduction is dominating the policy debate. If the dollar dropped, it would make U.S. goods more competitive, thereby increasing net exports, but Obama has made little committment in this direction and the process would take time in any case.

The best prospect is probably increased use of worksharing. Germany has used worksharing to lower its unemployment rate by more than 2 percentage points below its pre-recession level, even though its growth has been no better than growth in the United States. Worksharing does enjoy bipartisan support in the United States and is an option in the unemployment insurance systems in 25 states, but the takeup rate has been extremely low. It's possible that a major presidential push could substantially increase the use of worksharing.

Anyhow, it is striking that a speech that touched on many liberal themes did not make a commitment to full employment. This should have been noted in the coverage.

http://www.cepr.net/index.php/blogs/beat-the-press/a-liberal-agenda-without-full-employment

[ck4829]

1. Cut vicious circles and create a new CCC

Simple solution, but will never even reach the floor of the House.

[Fumesucker]

2. Just a minor oversight I'm sure

Nothing to worry our little heads over.

[HiPointDem]

3. no doubt. i'm sure the ptb care, they just forgot.

[Hekate]

4. The speech was already packed; looking forward to the SOTU

If he can get much of what he outlined in his Inaugural speech done, there should be a whole wave of new jobs in the offing.

Accomplishing the following Obama policies will require new hires:

Environment
Energy
Education
Infrastructure

I'm sure I missed something there. But think about it.

[ProSense]

5. First of all,

who on earth believes that a liberal agenda cannot precede full employment? There wasn't full employment through much of FDR's first two terms. You can layout an agenda that includes proposals to get there.

Secondly, it wasn't a policy speech. The President address everything from wages to work to the safety net in broad terms (http://www.democraticunderground.com/10022231646).

Finally, Dean Baker is proposing something he has already acknowledged is part of the President's jobs bill that was blocked by Congress.

Statement on the American Jobs Act and Work Sharing

Washington, D.C.- Following the President's address to Congress and the announcement of the American Jobs Act, CEPR Co-Director Dean Baker released the following statement:

"It is encouraging to hear that President Obama included work sharing as part of his jobs agenda. This is a job creation measure that both has been shown to be successful and has the potential to break through partisan gridlock.

"The basic logic of work sharing is simple. Currently the government effectively pays for workers to be unemployed with unemployment insurance. Rather than just paying workers who have lost their job, work sharing allows workers to be partially compensated for shorter work hours. Instead of one worker getting half pay after losing her job, under work sharing five workers may get 10 percent of their pay cut after their hours are cut by 20 percent.

"This situation is likely to be better for both employees and employers. It allows workers to maintain their jobs and continue to upgrade their skills. It avoids a situation where workers may end up as long-term unemployed and find it difficult to get re-employed.

"This is also likely to be better from the standpoint of employers since it keeps trained workers on the job. When demand picks up, they don’t need to find and train new workers, they simply must increase hours for their existing work force.

"This approach has been a proven success in many countries, most importantly Germany. The unemployment rate in Germany is half of a percentage point below its pre-recession level even though its growth has been no better than in the United States. If a work sharing program here in the United States can reduce dismissals and layoffs by just 10 percent, it would generate the equivalent of 2.4 million new jobs a year.

- more -

http://www.cepr.net/index.php/press-releases/press-releases/statement-american-jobs-act-worksharing

It really would be great if Congress revisited and passed the President's proposal.

The Jobs Program That Wasn’t

Macroeconomic Advisers on the American Jobs Act, proposed a year ago:

We estimate that the American Jobs Act (AJA), if enacted, would give a significant boost to GDP and employment over the near-term.

-The various tax cuts aimed at raising workers’ after-tax income and encouraging hiring and investing, combined with the spending increases aimed at maintaining state & local employment and funding infrastructure modernization, would:
-Boost the level of GDP by 1.3% by the end of 2012, and by 0.2% by the end of 2013.
-Raise nonfarm establishment employment by 1.3 million by the end of 2012 and 0.8 million by the end of 2013, relative to the baseline

Of course, it that had happened, Obama would be more or less a lock for reelection. Instead, having blocked the president’s economic plans, Republicans can point to weak job growth and claim that the president’s policies have failed.

http://krugman.blogs.nytimes.com/2012/09/08/the-jobs-program-that-wasnt/

[99Forever]

6. There are millions of us..

... to whom, some sort of living wage employment (Who am I kidding? ANY employment at all.) is the only issue that can help us.

Quite frankly, I am firmly convinced, that the ones in Washington DC that COULD do something about it, WON'T do it. They plain, just don't fucking care. They got theirs and that's all that matters to them.

[HiPointDem]

7. Yep. They won't, & that's the real inconvenient truth.