What President Obama Should Do About Jobs
Last Friday, as Americans geared up for a long weekend of potato salad and discount shopping, the Bureau of Labor Statistics released some somber news: The nation had netted not a single job in August. It was the first time that happened since 1945 (although there have been plenty of times since then that the nation lost jobs).
Nevertheless, by Monday the news had cast a pall over many Labor Day celebrations and injected others with a spirit of worker solidarity reminiscent of turn-of-the-century Progressivism. In Rochester, as in other municipalities, participants and spectators of the largest Labor Day parade in the city’s history took aim at union-busting Wisconsin governor Scott Walker, while in Detroit, Teamsters chief Jimmy Hoffa rallied a crowd waiting to hear from President Obama with what amounted to a declaration of war against the Tea Party.
But while Hoffa’s address may have been a warranted if crassly delivered expression of collective worker indignation, it was largely misdirected in its focus. Sure, the Tea Party makes an inviting target, but Washington has elevated undercutting American workers to the level of art form for years and under both parties. From lopsided trade agreements that pushed investment overseas to convoluted tax policies that keep it there, Washington has had its boot on the throat of the working class since the beginning of the end of American industry in the late 1970s. (There was still a boot left over for the middle class; but that’s another story altogether.)
On Thursday night the President is scheduled to deliver his highly anticipated jobs speech to a nation reeling from unemployment levels that are at double digits in some places. At the start of 2011, less than half of Americans of working age (47 percent) had a full-time job, according to the BLS.
The President has promised to deliver “bipartisan ideas” that he hopes will appeal to legislators on both sides of the aisle. According to press reports, Obama wants to inject up to $300 billion into the economy through—among other things—incentives for businesses to hire workers, a payroll tax cut and increased aid to the unemployed. More than half the stimulus is expected to come from tax cuts. Despite the high stakes, by most accounts, the President’s proposals will amount to a relatively vanilla package of programs that will leave Democrats wanting and Republicans whining. In other words, the President will once again try to be everything to everyone and fail.
So what’s to be done? There is certainly no shortage of ideas, ranging from Friedmanesque endeavors like Mitt Romney’s recently released plan to cut taxes and roll back environmental and banking regulations, to the creation of New Deal-style work programs like those outlined in bills proposed this summer by Reps. Jan Schakowsky (D-Ill.) and Keith Ellison (D-Minn.), to even more radical solutions like a plan outlined Wednesday by Northeastern University economist Barry Bluestone that would freeze public wages and levy a two-year, 5.5 percent “profits tax” on corporations operating in the United States that earned more than $1 million in profits in 2010.
Even Mayor Nutter has gotten into the act. Nutter—who serves as vice president of the U.S. Conference of Mayors—joined the group last Friday in releasing its USCM Common Sense Jobs Plan, which calls for increased investment in transportation and infrastructure, a $20 billion manufacturing loan program and an extension of unemployment insurance.
Unfortunately, while all these plans may have some individual merits (especially those, like the USCM proposal, that invest in manufacturing) all are relatively short-term fixes to a systemic problem that has been eating away at America’s economic power structure for the past three decades. Given time, the bridges will be built and the tax cuts will lapse and we’ll be right back where we started. To make lasting changes we need to invest in the nation’s long-term future, and that means reenergizing our industrial sector and opening new opportunities for the next generation.
Perhaps no one factor has had more impact on our current situation than the demise of American industry and the profound changes it has had on the aspirations of today’s youth. According to the Economist, for the first time since the industrial revolution, fewer than 10 percent of American workers are employed in manufacturing. A list of products that used to be made here before production was shifted overseas includes light bulbs, Levis, Rawlings baseballs, Converse sneakers, rail cars, steel re-bar, Pontiac automobiles and Radio Flyer’s Red Wagons. And that’s just a tiny sampling.
As a result of corporate-friendly trade policies that encourage firms to shift business offshore, the U.S. hasn’t seen a trade surplus since 1975, and according to the latest Census data our trade deficit hit $53 billion in June. Last year we imported $252 billion more in goods from China than we exported there (thanks to currency disparities that Washington needs to pressure Beijing to change). Between 1965 and 2004 manufacturing went from representing 53 percent of the economy down to just 9 percent as millions of jobs fled overseas.
Visit any city on the Eastern Seaboard and you’ll see the effects. Philadelphia is a good example. Drive north on I-95 and take a visual tour of the city’s former industrial grandeur in the crumbling gray hulks of abandoned factories. Or stay home and check out Workshop of the World, which details 150 sites that once employed thousands of our city residents.
Even the once mighty Silicon Valley no longer commands the level of spectacle it once did as most of the big chip factories that gave the region its name have moved overseas.
We have left our young people with two choices: Go to college (even if you’re not cut out for it) and join the growing base of new graduates taking jobs in retail services and restaurants because they can’t find work in their field, or don’t go to college and compete for one of the same jobs.
Today one in every 10 employed people work in the restaurant industry; having spent a decade there myself, I can attest that it is not a desirable career choice, lacking most if not all of the benefits many take for granted: paid vacation, health care, personal days.
Here’s the rub: despite this mass of unemployed youth there aren’t even enough skilled laborers to fill the few remaining trade and manufacturing jobs we have left. Back in May, Mike Rowe, the host of the popular television show Dirty Jobs, testified before a Senate subcommittee on this skills gap, blaming it on the near religious worship of a college education and the disappearance of the vocational arts in high school.
“We’ve elevated the importance of ‘higher education’ to such a lofty perch that all other forms of knowledge are now labeled alternative,” he told lawmakers. “In a hundred different ways, we have slowly marginalized an entire category of critical professions, reshaping our expectations of a ‘good job’ into something that no longer looks like work.”
We need tougher trade laws, incentives for businesses that hire Americans, tax breaks for industrial facilities that stay in, or relocate to, the United States and increased tariffs for U.S. companies that move manufacturing offshore. Once we have that foundation we need to once again encourage our children to follow their hearts and when applicable, use their hands. In the meantime, support your local businesses and when possible buy things that are made in America. It might cost you a little more, but think of it as the price of patriotism.
Writer and photographer Christopher Moraff is a news features correspondent for the Philadelphia Tribune and a contributing writer for the Chicago-based magazines Design Bureau and In These Times, where he serves on the board of editors.