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TEXT OF COMMENTARY
Kai Ryssdal: The theme of the day tomorrow at the White House is going to be jobs, jobs, then more jobs. The president’s hosting a big jobs summit. The goal is to figure out how to create more of them, and at the same time bring the unemployment rate back down into the single digits.
The president has invited members of Congress, CEOs from companies like Fed Ex, Google and Boeing. Not to mention a gaggle of economists and a certain former Secretary of Labor.
Commentator Robert Reich offers a sneak preview of what he’ll say.
ROBERT REICH: Most ideas for creating more jobs assume that jobs will return when the economy recovers. So the immediate goal is to accelerate the process. A second stimulus might be helpful in this regard, if the nation could afford it.
Other, less expensive ideas include a new jobs tax credit for any firm creating net new jobs. Lending directed at small businesses, which are having a hard time getting credit but are responsible for most new jobs. A one-year payroll tax holiday on the first, say, $20,000 of income, which would quickly put money into people’s pockets. Such a holiday would also make it cheaper for businesses to hire because they pay half the payroll tax. And maybe even a WPA-style program that hires jobless workers to insulate homes.
But there’s reason to believe the basic assumption that jobs will eventually return when the economy recovers is wrong. Under the pressure of the Great Recession, many companies have found ways to cut their payrolls for good. They’ve discovered that new software and computer technologies have made workers in Asia and Latin America just about as productive as Americans, and that the Internet allows far more work to be efficiently outsourced abroad.
This means many Americans won’t be rehired unless they’re willing to settle for much lower wages and benefits. The official unemployment numbers hide the fact that a large number of Americans already have had to accept lower pay as a condition for keeping their jobs. Or have lost higher-paying jobs and are now in ones that pay less.
Yet reducing unemployment by cutting wages merely exchanges one problem for another. We get jobs back but have more people working for pay they consider inadequate, more working families at or near poverty, and widening inequality.
The goal isn’t just more jobs; it’s more jobs with good wages. Which means the fix isn’t just temporary measures to accelerate a jobs recovery, but permanent new investments in the productivity of Americans.
RYSSDAL: Robert Reich teaches public policy at the University of California Berkeley.