We Desperately Need More Job Creation

While the national unemployment rate is still below 10 percent, black men have experienced double-digit unemployment rates for most of 2008 and for all of 2009, so far. In September, the official unemployment rate for black men was 17.9 percent. Black women were not too far behind with an unemployment rate of 13.2 percent.

The unemployment rate is expected to continue to rise into 2010. This means that we can expect hundreds of thousands more blacks to join the ranks of the jobless. A recent survey by New America Media [PDF] found that a third of blacks who now have full-time work are worried about losing their jobs. Another recent survey by the Economic Policy Institute, my organization, found that two-thirds of blacks think that the lack of jobs is the most important economic problem facing the country.

Blacks are right to be worried. The most optimistic estimate is that we should expect to see high rates of unemployment until 2014. It could easily be longer if we have a “jobless recovery” as we did after the last recession.

This does not have to be our future. We know how to create jobs. We know how to ease people’s economic hardship. What we are lacking is the political will.

My organization has presented a plan to Congress [PDF] to create more jobs. It calls for the federal government to do five things. First, we need to extend unemployment insurance again and bolster the safety net by making sure that everyone who needs food stamps and Temporary Assistance for Needy Families can receive it. These programs put dollars in the hands of the neediest households. These households then quickly spend these dollars and the dollars go to work in the economy. This circulation of dollars creates jobs while helping the neediest.

The second part of the plan is to provide more aid to states. As the American Recovery and Reinvestment Act has been creating jobs, states facing deficits have been slashing jobs and reducing worker hours. More aid to states could reduce the job cuts at the state-level. It is also important for state agencies to be fully staffed because during a recession is when the public has the greatest need for state services.

The third component of the plan is for the government to create public service jobs as it did during the Great Recession. Many poor, urban communities have streets, parks and schools that need cleaning, maintenance and repair. The government could create a corps to do this or some similar work.

The fourth part of the plan is to provide a tax credit to businesses for job creation. This tax credit would reduce the cost of hiring new workers and therefore increase hiring.

The final part of the plan is to increase spending on infrastructure, especially on school construction. All of these proposals are very effective at creating or saving jobs, and jobs are desperately needed, especially among blacks.

The American Recovery and Reinvestment Act (ARRA) has been important in helping to ease the damage cause by the recession. Unfortunately, it was created before anyone had a sense of how bad this recession would turn out to be. The ARRA was designed to create or save 3.5 million jobs, but we are currently short 10.7 million jobs. Three and a half million jobs helps, but it is not enough.

If we allow the economic suffering to persist for the next five years or more, we should expect worse outcomes for black youth. Children who grow up in poverty have worse educational and economic outcomes. We should expect stagnating or declining test scores and increases in youth crime and teen pregnancy. Each additional year of high black unemployment will lead to an additional increase in the poverty rate for black children.

We need jobs!