Recognizing the social, economic and political threat posed by double-digit unemployment numbers, and by the prospect that those numbers are continuing to rise, key Democratic senators are proposing an innovative two-year plan to spend as much as $600 million to avert layoffs.
The plan to support so-called “work-share” strategies — where firms keep workers on the job with reduced hours and state programs then step in to fill the pay gap — is a classic government intervention. Yet it has won the backing not just of progressive economists but of a top economic adviser to Republican John McCain’s 2008 presidential campaign.
Unfortunately, this smart alternative to layoffs has yet to earn the embrace of an Obama administration that — despite a growing sense of urgency on the part of the president who has scheduled a December 3 forum on job creation and a cross-country “economic recovery tour” — remains far too resistant to immediate and necessary responses to the unemployment crisis.
If the administration gets serious about addressing joblessness, however, the anti-layoff initiative proposed by Rhode Island Senator Jack Reed, a key Democratic member of the Senate Banking Committee, merits serious attention.
No, Reed’s legislation is not the answer to every challenge facing a country with an official unemployment rate of 10.2 percent and a real rate that (when frustrated job-seekers and the underemployed are counted in) is closer to 17.5 percent.
There are other bold plans out there, including a call made Tuesday by the AFL-CIO for the government to spend as much as $3 trillion on schools and highway repairs to help create jobs.
But Reed’s proposal has generated excitement because it is a proven approach that can be put in place immediately in states across the country.
And it could save as many as 500,000 jobs a year.
Reed’s proposal is designed to strengthen existing state programs and to immediately develop new ones with an eye toward bringing a halt to the hemorrhaging of jobs that continues even as some in Washington continue to chirp about upticks on Wall Street.
Because of the ease with which it can be implemented, as well as its flexibility and cost effectiveness, the Reed plan has begin to attract key allies in the Senate. Massachusetts Senators John Kerry and Paul Kirk are co-sponsors, as is Vermont Senator Patrick Leahy.