Public Service Employment

Dear President Obama, and others, April 2, 2010

Needed: A Federal Jobs Program

To President Obama and others, April, 2010

Since December of 2007 we have lost 8.4 million jobs. I am sending a mix of plans to create federal jobs.

The Jobs Future: But first let me quote from a Rutgers University report, “Erasing this [jobs] deficit will require substantial and sustained employment growth. Even if the nation could add 2.15 million private-sector jobs per year starting in January 2010, it would need to maintain this pace for more than 7 straight years (7.63 years), or until August 2017, to eliminate the jobs deficit!” The Executive Summary also notes, “To put this new millennium into perspective, during the final two decades of the twentieth century [1980 - 2000], the nation gained a total of 35.5 million private-sector jobs. During the current decade [2000 - 2010], America appears destined to lose more than 1.7 million private-sector jobs.” (Sources at end of essay) The proposed rate of growth, 2.15 million new private-sector jobs per year, would be 80 percent faster than the growth rate from 2000 to 2007, and 10 percent slower than the growth rate 1992 to 2000.

So I offer these different plans to chose from:

1. The plan by the Levy Institute of Economics, “Why President Obama Should Care about ‘Care’” would employ 2।4 million mostly women and low-income, less educated workers at a cost of $100 billion, or about $42,000 per job. The focus of their employment would be childcare, pre-school education and in-home health care.

2. Providing work to mostly men is the plan by Robert Pollin, published in The Nation magazine, February 18, 2010, that would push $500 billion into the economy by guaranteeing to banks the loans they make to local and state governments to retrofit and insulate public buildings, and subsequently expand the loan guarantee to projects that would insulate private residences.

3. Rutgers University Professor Phillip Harvey provides a program that spends a net $666 billion to create 18 million jobs paying $14 an hour with benefits। In “Learning from the New Deal” the costs are broken down, and I’ve included the last page. Professor Harvey has been writing about full employment for over 20 years. (available for download at www.jobsconference.org) His program is my first choice for your administration.

४. The brief plan by Princeton University Professor Martin Shubik outlines a plan for a permanent “Employment Reserve Authority” headquartered in the Federal Reserve. This would establish a permanent WPA-like job repository of public works projects in all 50 states, so the nation would not have to wait for Congress and the states to slowly respond to a crisis in unemployment.

5. The plan by Jeff Madrick, outlined in his book The Case for Big Government, would bring our economy more in line with other advanced economies by increasing federal government expenditures from 21% to 24% of GDP। It would cost $432 billion annually.

6. Joe Persky of the University of Illinois at Chicago offers a 5 year program to ramp up to a $975 billion expense to create about 18 million jobs paying over $18 an hour, funded mostly by a financial transaction tax. See “A Permanent Jobs Program for the U.S.” at jobsconference.org.

I was planing to include pages from these reports, but I think brevity is better. All these are available on the www net.

7. Professor Emmanuel Saez of the University of California, Berkeley, has shown that the top one percent of households received 23.5% of the national income in 2007. The bottom 60 percent of households took in less, only 20.3%. (This datum comes from State of Working America, 2006/2007, page 779 from a report by the Tax Policy Center, Brookings/Urban Institute) Moreover the one percent group received 65% of the economic gains the economy generated 2000 to 2007, as well as receiving about 35% of the tax cuts that in turn added over $800 billion to the national debt.. The top ten percent of households took in almost 50% of the national income, which amount is about 17% higher than its average income during the forty year period 1942 to 1982 when the economy flourished as never before or since. His report is on the www net.

The sum of 1) the U3 unemployment, 2) the U6 under-employment and 3) full-time workers earning below poverty wages --- is 1 in 3 workers (35.9% in March, 2010) who are not meeting their needs. They are poor, or becoming poor. We need a bottom-up stimulus. One in three workers in 2009 experienced unemployment. The next election will be fought over a new stimulus.

According to my reading of The State of Working America 2006/2007, page 79, the bottom 60% of households received 20.3% of the national income, while the top 1% took in 23.5% (this last datum from the Saez report). That is to say, about 70 families with the average income of the lower 60% would equal one family income of the top one percent. In regards to wealth, the bottom half of U.S. households owns 2.5% of the national household net worth, while the top 1% owns over 34%. That is about $23,000 vs. $14 million. That indicates that 609 average families in the bottom 50 percentiles are equal in savings to one family at the top.(see Federal Reserve report Survey of Consumer Finances).

I currently read the twice monthly blog by Warren Brussee. In 2004 he wrote the book The Second Great Depression, Beginning in 2007, Ending in 2020. He was ahead of almost everyone else, and he still is. I recommend you read his reports at WordPress blog, and you will be more wary of the economy’s putative good news.

Vice President Biden’s economic advisor is Jared Bernstein. In 2007 he wrote, “Finally, there is a role for direct public-sector employment to create employment opportunities for the least advantage in society.” (See EPI.org, Briefing Paper #200) He knows a lot about this, he also co-authored a book with Dean Baker. The Economic Policy Institute, where he once published, offers a plan amounting to a $400 billion one-time stimulus.

The nation is in a teachable moment. The November election will revolve around a Democratic stimulus and a Republican rejection. You will have to carry the argument.

I hope everyone in the nation writes you a similar letter, and then watches closely.

Best wishes and Take care,

Ben Leet

--- in San Leandro, Calif.
see my blog at http://benL8.benL8.blogspot.com
see the blog http://fullemployment.blogspot.com for additional ideas.

Sources: see my blog, the three previous essays for full resource notation.