Today, we face “gilded age inequality, robber baron corruption, financial booms and busts, a broken health care system, increasing poverty, and spending as much on military as the rest of world combined, while we are less secure and more threatened….We are called to act — the country is turning and we have the opportunity to decide how it will turn; the stakes are too high to get tired or cynical or pessimistic about the odds.” At the National Community Reinvestment Coalition’s 20th Anniversary Conference earlier this month, Robert Borosage, President of the Institute for America’s Future and Co-Director of The Campaign for America’s Future inspired NCRC’s members and called them to action on America’s number one priority: job creation.
Christian Dorsey, Director of External and Government Affairs at the Economic Policy Institute (EPI), began this plenary on creating sustainable jobs with a of staggering array of statistics on the long-term impact of the economic recession. He described how the 9.7 percent unemployment rate only begins to reveal the economic condition of the country. After accounting for lost jobs and population growth, we need to add 11 million jobs just to catch up to pre-recession levels of employment. If you consider the 16.8 percent of the workforce that is underemployed, more than 26 million under-or unemployed Americans are struggling to find a way to feed their families.
Beyond unemployment, this crisis has led to a tragic increase in childhood poverty, which will haunt our economy and society for decades. The overall childhood poverty increased from 18 percent in 2007 to 27 percent. Due to persistent racial disparities, black childhood poverty has increased from an unbelievable 34 percent in 2007 to an unconscionable 53 percent. With the median laid-off worker unemployed for nearly five months, the effects of long-term unemployment will likely prove to be chronic. Studies have shown that family income, which has declined 7.2 percent for low-income families and 5.6 percent for middle-income families, has a correlation to test scores for school-aged children. During this recession, 20 percent of students aged 18 through 29 have left or delayed college, which could be the costliest detriment to future potential: not only does a college education correspond to higher earnings, lower unemployment, better health, lower incarceration rates and higher volunteerism rates, but education is also linked to higher educational achievement for offspring. Income loss also corresponds to lower lifetime wages, implying that millions of people will never realize their wage potential. To make matters worse, this crisis is not likely to end soon; if this recession follows the trajectory of the previous recession, it could last through July of 2014.
After outlining the urgency of the economic crisis and its potential impact on years and generations to come, Dorsey offered a solution: EPI’s five point plan to stem the U.S. jobs crisis. This plan is supported by the Jobs for America Now Coalition, a coalition of more than 60 progressive organizations, including NCRC, which is calling for broad action to create millions of jobs and a robust and equitable economy. Dorsey’s plan calls for a national jobs agenda to address:
- Strengthening the safety net — Dorsey described how this economically efficient intervention to ‘stop the bleeding’ by putting money in the hands of the neediest families will increase spending in local communities and spur private sector growth, resulting in the greatest “bang for your buck.”
- Fiscal relief for state and local governments — if fiscal relief provided in the Recovery Act is extended through 2011, 1 million to 1.4 million jobs will be saved;
- Investments in transportation and schools — this investment will put people to work and invest in our future capacity;
- Public service jobs — Dorsey supports Representative George Miller’s Local Jobs for America Act, which gives money to local and state governments to fund jobs and services in the public and nonprofit sectors and on the job training in the private sector;
- Job creation tax credits — for businesses, nonprofits and state and local governments that enlarge their payrolls through hiring, adding hours, or increasing wages;
Dorsey admitted that this agenda for sustainable recovery will be expensive; in fact he is calling for $400 billion to be spent over the next two years. However, he dismisses the myth that we should be more concerned with the growing deficit as a political, rather than economic, obstacle. In fact, he argued, the country cannot afford not to spend more on job creation.
As Dorsey concluded, he urged the audience to recognize and work to correct the deepening wage inequality along economic and racial lines that has persisted due to discrimination, lower levels of educational attainment and incomes closely tied to economic fluctuations. To reduce this wage inequality — which is key to ensuring that low-income and minority populations are less vulnerable to future economic downturns — Dorsey recommended that the federal government enact minimum/Living wage enhancements, invest broadly in job creation, remove barriers to unionization, investment in manufacturing sector, emphasize fair as opposed to free trade, and reorient the Federal Reserve to seek full employment and not just low inflation.
Borosage echoed Dorsey’s call for a bold jobs agenda and the need for a structural change to our economy. He also stressed the daunting stakes of getting this recovery right: “over the next few years, our efforts will decide whether we remain a middle class nation — whether the entry ramps to the middle class will stay open and whether the benefits of growth will be widely shared or whether we will see an ever more unequal society with entrenched poverty.”
The reality of this economic collapse is that it has been coming for a long time. Borosage explained that, as Dorsey’s statistics illustrated, income for blue-collar workers is about the same as it was 30 years ago, while costs have soared and American work hours have become the longest of any industrial country. To cover increased costs, families have gone into debt, juggled credit cards and tapped into their home equity; in essence, many Americans, particularly low-income families, have been taking water into their homes for decades. As a result of this current recession, Americans have seen $5 trillion of savings lost, $7 trillion in home values evaporated and more than 8 million jobs lost. These families are “no longer taking in water, they have sunk.”
Another point Borosage made is that this crisis was not an act of nature but the result of deliberate conservative policies that have lowered taxes disproportionately for high incomes, emphasized deregulation and free trade, launched a war on unions and encouraged smaller government. As Borosage put it, for much of the past 30 years, we gave conservatives “the wheel to drive and they drove us off a cliff.” For too long, industry has had government to clean up after them: “they are the cronies of crony capitalism.” In order to change direction, we need to purposefully and thoughtfully change the policies and ideas that are in power.
Borosage quoted President Obama’s declaration that “We cannot rebuild this economy on the same pile of sand. We must build our house upon a rock. We must lay a new foundation for growth and prosperity.” Structural changes envisioned by President Obama include building new a physical and education infrastructure to meet the needs for the 21st century and empowering workers to ensure that a broad middle class is rebuilt. A key component of structural change, according to Borosage, is to renew our commitment to an industrial and trade policy that makes sure goods are made in this country. He explains that one result of our recent pattern of outsourcing jobs overseas is that a startling 70 percent of the Recovery Act money is actually creating jobs out of the United States.
Despite President Obama’s vision, partisan politics has obstructed efforts to enact the structural changes necessary to lay a foundation for a renewed American prosperity. Despite having significant majorities in Congress, the Democrats have only passed very watered down elements of the President’s agenda and Republicans have not been forced to make any policy changes; in fact, their obstruction has been “rewarded politically.” Progressives have essentially turned “the wheel back over to reckless drivers that took us off the cliff in the first place.” What conservatives have been successful at is changing their pitch and repackaging the same policies and programs in the guise of populism. Borosage predicted that Republicans’ guile and the Democrats’ failure to act at the scale deserving of this crisis will have bad electoral consequences in the fall.
Borosage concluded with a call to action:
bq. “This argument is happening right now and it will define what kind of an economy and society we will be. Will we continue to have a middle class? We have to win this battle against entrenched and monied interests; we have to win at level of ideas. We need to explain to Americans how we went wrong and why we need another way, why we need to take control of our government and make it an instrument for serving a common purpose. This cannot happen in DC — it needs to be done in our communities. This battle is crucial and it is on!”
He challenged the audience to “go back to their communities and fight this battle” (yes, on top of preventing foreclosures and helping people train for and find jobs) and to win it on the ideological level; to fight at all levels of government for reforms, including energy standards, infrastructure investment, training and education that is linked to jobs, research and development of new technologies. We can win this fight, Borosage declared, if we can explain to people how the money for necessary reforms will be spent and if we can clearly describe to people what they already know so they “can use common sense, rather than getting misled by people trying to mislead them.” Despite the daunting odds, this is the best opportunity for reform since the 1960s and “we have no excuse to get tired, or discouraged, or pessimistic or cynical of the odds.”