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Stacey Vanek-Smith: No matter whose numbers you believe, nearly 10 percent of this population is unemployed. And pretty much everyone agrees the economy can’t really recover with so many people out of work. Robert Reich is the former Secretary of Labor and is a professor of public policy at Berkeley. Good morning Robert.
Robert Reich: Well good morning Stacey.
Vanek-Smith: So it seems like job losses just keep mounting. Is there a light at the end of the tunnel?
Reich: Well eventually. But things will get worse before they get better. The experts I talk with expect double-digit unemployment through most of next year.
Vanek-Smith: I thought that we’ve been hearing a lot about how we’ve kind of turned a corner in this recession?
Reich: Well we may have turned a corner, but jobs are the last things to come back in a recovery. And this time around, I’m afraid that they will be even slower because of the huge borrowing binge that led up to the recession. Consumers and businesses are reducing their debts and cutting their expenses, which means less demand for all the goods and services that people produce. And that means fewer jobs. Profits are up, but in many companies that’s because they’re cutting payrolls.
Vanek-Smith: What does another year of high unemployment mean?
Reich: Obviously it means hardship for millions of American families. Right now, 1 out of 6 Americans who wants and needs a job is either unemployed or underemployed.
Vanek-Smith: So Robert, what is a possible solution to this pretty bleak-sounding job picture?
Reich: Well I wish there were a simple solution, Stacey, there isn’t. There’s no magic bullet. Next year is a mid-term election, so Congress and the administration are going to want to do everything they can, or at least show that they’re doing everything they can. So expect for example, a new jobs tax credit for small businesses that create new jobs. I’d also expect more small-business loans, continuing spending from the stimulus package. That’s going to help, that continuous spending from stimulus package because much of it will be spent next year. But it’s going to be offset by the states, which are cutting their budgets and laying off workers. The states are engaged in a kind of reserve-stimulus. So the White House might try to increase or extend the stimulus.
Vanek-Smith: In other words, we’re going to battening down the hatches?
Reich: I’m afraid so, Stacey. I wish this could be a more upbeat report.
Vanek-Smith: Robert Reich is the former Secretary of Labor, and a professor of public policy at Berkeley. Robert, thank you.
Reich: Thanks, Stacey.
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