Jobs report: 3 views on the best way to create jobs in the US

1.Demand side: Restore public-sector jobs and invest in infrastructure for immediate jobs and long-term growth.

A sign attracts job-seekers during a job fair at the Marriott Hotel in Colonie, N.Y., Oct. 25. The Labor Department reports that the economy added 171,000 jobs in October while unemployment rose to 7.9 percent.
(Mike Groll/AP)

After coming into office in the depths of the Great Recession, President Obama has helped create more than a million jobs over his first term. The American Recovery and Reinvestment Act of 2009, support for the auto industry, and other policies implemented by the 111th Congress in 2009 and 2010 set the right path forward, fostering 31 months of private-sector job creation.

Deficit spending has been effective in boosting job creation. In 2008, the economy began losing jobs, and by the winter of 2008-09, the economy was shedding more than 20,000 jobs per day, more than at any point since the Bureau of Labor Statistics began tabulating these data in 1948. The Recovery Act led to a rapid reversal in the number of layoffs, and starting in March 2010, the economy saw jobs being added each month.

Though private-sector jobs have grown, the decline in public-sector employment is holding the US economy back. The economy has lost nearly 700,000 public-sector jobs since April 2009. Our unemployment rate would be at least a full point lower without those losses.

What we need is to continue along this path of success. The American Jobs Act, which Mr. Obama put forth more than a year ago, would put teachers back in schools and cops back on the beat and modernize classrooms across the United States. 

There is an ongoing need to upgrade our aging infrastructure, and with interest rates at historic lows and millions unemployed, it is good economics to make these investments now. They will pay off over the long term both by improving economic growth, which will make paying back the debt easier, as well as by leaving a legacy of projects that will enhance US productivity for decades to come, also boosting long-term growth.

Moving to supply-side economic policies, as Republican presidential candidate Mitt Romney advocates, will not only stymie job creation, but also risk pulling the economy backward, as these were the very same policies that got us into this mess in the first place.

Heather Boushey is a senior economist at the Center for American Progress in Washington.

2.Supply side: Extend Bush-era tax cuts to spur economy. Cut spending to curb growth-crushing debt and deficit.

There is a sharp contrast between the Republican and Democratic views when it comes to the issue of job creation.

Upon taking office in 2009, President Obama signed the American Recovery and Reinvestment Act, which was predicted to provide a Keynesian or demand-side stimulus to the economy, spurring growth and job creation. 

One could argue endlessly about whether the $814 billion injection into the economy created or saved millions of jobs. The fact is that three years down the line, the lofty prediction that the Recovery Act would result in average unemployment rates of 6 percent or less has not worked out. It’s time to try a different approach.

Supply-side economics makes several common-sense predictions about ways to stimulate economic growth and job creation. Tax cuts are important for businesses of all sizes – large and small – and for individuals. Lower tax burdens mean everyone has more money to spend, invest, and expand the economy. If that logic holds for those earning less than $250,000, why wouldn’t it hold for those making more than that arbitrarily picked amount?

Both sides should agree to extend for all income classes the Bush-era tax cuts set to expire at the end of this year. This would lead to a cycle of investment, hiring, and economic growth that would end up increasing government tax revenue (more earners making more money), thus reducing the deficit and debt. At the same time, it would also resolve the growth-crushing uncertainty about tax rates currently facing businesses and consumers.

Spending cuts are also important to get skyrocketing debt and deficits under control and to assure businesses and consumers that they won’t face future tax hikes to finance government operations.

In August 2009, Mr. Obama warned against raising taxes in an economic downturn since it “would just ... take more demand out of the economy and put business further in a hole.” Now, he must heed his own advice.

Aparna Mathur is a resident scholar at the American Enterprise Institute, where her work focuses on taxes and wages.

3.Another way: Invest in community-based, member-owned cooperatives and reduce the workweek.

To create jobs in America, we must change how we organize our work.

We have relied for too long on the conventional corporation as the primary mechanism for generating employment. We must now invest in other models that have proved to be a success, such as cooperatives, credit unions, and employee-owned companies. 

These democratic, collaborative groups are people-centered, place-based, and often more stable than traditional corporations. They are not subject to the whims of investors in search of short-term profits. A job in an employee-owned company cannot readily be outsourced, and a cooperative cannot readily be moved. 

More than 130 million Americans already belong to member-owned co-ops, employing 865,000 people. In Cleveland, Evergreen Cooperatives have launched an industrial laundry service, a solar company, and an urban growing center to create living-wage jobs in a community with an $18,500 median household income.

In addition to having local roots, such organizations offset the sometimes perverse effects of mechanization and information technology, which displace jobs. Instead, these organizations look for human solutions rather than software to increase productivity.

Our society’s emphasis on paid employment also ignores the “core economy” of unpaid work, such as child rearing, domestic labor, and community activities. Reducing the workweek would redistribute available work among more people, giving workers more time to devote to their families and communities. For some, this might mean exchanging our mad-long rush toward owning more stuff for new and more lasting, meaningful benefits that come from a broader set of community sources. For example, time banks facilitate the democratic exchange of volunteer services.

This is not a pipe dream. In America, people are yearning for a new economy that increases well-being, improves employment, diminishes meaningless consumption, and lowers destructive impact on the environment. That economy is now rising from the ground up.

Bob Massie is the president of the New Economics Institute.