What occurs to me is that people aren't going back to work any time soon. Not because they don't want to. Not because they are "lazy", "spoiled", "animals" or other nice things that have been said about the jobless by Republican "leaders". Rather, they are not going back to work because even low wage jobs are not readily available, and in particular, the long term unemployed are lacking the specific skills needed in the current economy.
We are living with the worst long term unemployment since the Great Depression. Then, the unemployment rate was higher, and went from the early 1930s until the middle of World War II. In between, while the private sector was recovering, the government moved decisively to provide a source of income to millions, who in turn, spent what they made. When the New Deal programs were cut back, the economy worsened, until the war activated employment in the "war effort".
Today, the statistics are appallling, but can be and have been analyzed by economists everywhere. The first line of defense was Unemployment Insurance, not available in the 1930s. The individual States are responsible for the first 26 weeks of benefits. After that, the Federal Government picks up the tab. And what is that tab? Well, there's a good question. I have searched for 2 years to find out how much has been spent on unemployment benefits by both the States and the Feds. I know the data is around, because I called Mark Zandi, got an assistant, who told me it was proprietary to his company, Moody's. I tried the Bureau of Labor Statistics, not available. I tried columnists, no answer. I asked a friend who runs a State Unemployment program. No response.
So I did some arithmetic. Learned it in grade school. I assumed $250.00 per week and 12.7 million people unemployed and still looking for work, as of June 2012, according to the Bureau of Labor Statistics. That totals $165.1 Billion Dollars, per year. Understand that this is my estimate. But if you add that since 2009, that's a lot of money. And I would bet every penny was spent back into the economy.
What does that mean? It means that there are a lot of people who could have been put back to work, earning a living, even a meager one, for the dollars spent after week 26. It means that state coffers would not be empty, and no longer available for continued unemployment. The 99ers, so called because the maximum number of weeks the benefits will be paid is 99 weeks, would have a chance to get up each morning, go to a job, and not slowly be forgotten. They would have a chance to maintain or rebuild a skill set necessary to participate gainfully in this economy.
The failure of Congress to implement a modern day version of the New Deal is criminal neglect. There is and has been structural unemployment in this country for years. Structural unemployment is simply defined as the lack of skilled workers in a place where the skills are needed. People are structurally unemployed because they do not have the skills required to fill jobs in their location. Matching skills and mobility is necessary to resolve this condition. That means today you have to have a knowledge of computers, hardware and software, to be qualified for virtually any job. You need an education. Reading and writing are nowhere near enough. There are no factories, where granddad and dad worked anymore. There is a racial component to structural unemployment, which is a book by itself.
Okay, so what do we do? Lots of people much smarter than I am have proposed a variety of answers. To me, the most effective way to move things forward is a commitment by the Federal government, I mean Congress, to do what has not been done. The Society of Civil Engineers has said that the infrastructure of America, built by a generation deserving to be called "Greatest", has lived its useful life and needs to be rebuilt. The commitment I have in mind is this. The Engineers said to repair what needs fixing will costs $2.2 Trillion. For the next 10 years, commit $220 Billion to rebuilding America. That's about the same amount as unemployment costs us now, and a little more taken from the Defense Department since we are not spending it in Iraq. So far, no new tax money.
I did a little more arithmetic. 220 Billion divided by an average wage of $40,000 would put 5.4 million people back to work. For 10 years. The money they will spend, plus the new business that will be created around the new construction areas, will further expand the growth. It's not a "high paying job", but it's work. And it matters. It will take 2 million newly employed people to reduce the unemployment rate by 1%. This approach still won't bring us to full employment, and doesn't take into consideration the 12-15 million others who are working part-time or who have given up. But positive movement has always created its own inertia. It will this time too.
There is another part of the plan that must be included and integrated to make the whole work. Training and education. We must increase and improve the focus on education for future employment needs now. Industrial skills, information technology skills, financial skills are all going to be needed in the future and will bring structural unemployment to an end. Without this kind of commitment, we will watch politicians allow this country to go dissolve into ruin, on many levels. The shame of it is that it doesn't have to happen.
We are all in this mess together. The proverbial rising tide raises all boats. But we need to have the boats first.
Thanks for stopping by.
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