The Jobs Solution | The Nation


The Jobs Solution

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What Needs to Be Done

About the Author

Donald W. Riegle Jr.
Former Michigan Senator Donald W. Riegle Jr., a member of the Smart Globalization Initiative and chair of government...
Leo Hindery Jr.
Leo Hindery Jr., chair of the Smart Globalization Initiative at the New America Foundation and an investor in media...

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The solution to the jobs crisis depends on manufacturing and trade policy reform.

Working with those who understand the urgency of creating millions of high-value-added jobs--and the higher family incomes and tax revenues that will follow--the Obama administration and Congress need to "slipstream" behind the bailouts and develop long-term plans to support the renewal of manufacturing. These plans must be designed to stimulate business invention and innovation, and to spur productivity growth across the nation. The objective must be to find those 24 million missing jobs, and their centerpiece must be a much stronger nationwide commitment to healthy, well-educated and well-trained workers, especially in the manufacturing sector.

Congress must take steps to change our labor policies to foster a true high-wage economy. Over and above what is proposed in the new federal budget, this will require:

§ Immediate passage of the Employee Free Choice Act, which will allow workers to join unions without obstacles.

§ A national pension policy to restore adequate retirement savings.

§ Concrete efforts to restore the essential tax-policy link between productivity growth and wage gains, which will almost surely mean adopting a value-added tax of the sort nearly every other developed country already has.

§ A ten-year program of significant additional public investment to upgrade and rebuild our nation's infrastructure for the twenty-first century, which would create millions of jobs and make it easier for American-based companies to succeed in the global marketplace.

§ A very strong "Buy American" requirement related to all federal procurement, as Obama promised when he was campaigning. (We would never allow TARP money to go toward bailing out foreign-owned banks, so why, we must ask, is there obviously one set of rules for US banks and Wall Street institutions and a very different set for companies that produce their goods and services on Main Street?)

§ Major new tax incentives for businesses of all sizes to invest in state-of-the-art laboratories, domestic jobs-focused R&D, innovative products and follow-on manufacturing plants and equipment.

As Obama also proclaimed during the campaign, American workers are entitled to trade agreements that have meaningful labor and environmental standards, that forbid illegal subsidies and currency manipulation, and that are rigorously enforced. And it's time to dispense with "one size fits all" agreements that blindly ignore significant differences in states of development, forms of government and reciprocity. Congress also needs to:

§ Reauthorize and substantially increase Trade Adjustment Assistance and turn it into a remedial program that is not the displaced workers' "burial insurance" that it is right now.

§ Double the $117 billion in aid to state and local governments that was in the first stimulus plan, because every dollar to them represents jobs saved or created.

§ Authorize and substantially fund programs--like Roosevelt's Civilian Conservation Corps; later programs like VISTA and CETA; and the Serve America Act, which has already cleared the Senate--that will provide employment opportunities for this year's 6.4 million high school and college graduates, and for the graduates who follow.

§ Significantly expand job training for millions of young people to be skilled electricians, advanced welders and computerized machine tool operators, and create millions of complementary apprenticeships in manufacturing and the energy industry.

Jobs, Jobs, Jobs--24 Million More of Them, in Fact

The need for jobs creation is paramount and massive, and the task of meeting this need will be even greater. FDR had to find 13 million jobs during the worst of the Great Depression, and in 2009 we need to find 24 million, albeit in a much larger economy. But still, that's 24 million jobs!

Roosevelt knew that the answer for his administration would not be found only in the private sector, as ideal as that would have been and as much of a believer in capitalism as he was. The answer today won't be found only there, either.

In addition to the public jobs programs for the nation's youth and the training and apprenticeship programs that we have already called for, the administration and Congress also need to help create millions of jobs for the nation's adults: those who are young, approaching retirement and who were once retired but now need to go back to work.

Specifically, we need a large-scale program to create short- and medium-term jobs that complement those of the companies receiving stimulus-related contracts and subsidies, until these jobs can migrate to the private sector. With thoughtful use of tax policies, we must do everything we can to retain and strengthen the relatively few manufacturing jobs that remain. We need a program that emulates the best of the WPA and the TVA, and then we have to export this program to all fifty states. And we need aggressive public-sector employment initiatives, especially based around infrastructure construction and K-12 education.

None of the actions we call for will be easy to accomplish, nor will they come cheap. Yet we need all of them so that American workers can be fully employed in jobs that pay fair wages. We need them to rebuild, and sustain, the great commercial engines that fostered the broad American middle class of the past century and underpinned the global prosperity of the past quarter-century. We need them to bring an end to America's sorry status as the world's largest debtor nation. And we need them for our national and economic security.

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