Washington’s latest answer to the worst jobs crisis since the Great Depression is $26 billion in aid to state and local governments. This still leaves the states and locales more than $62 billion in the hole this fiscal year. And because every state except Vermont has to balance its budget, the likely result is 600,000 to 700,000 more state and local jobs vanishing over the next 12 months (including private contractors and other businesses that depend on state and local governments) according to the Center on Budget and Policy Priorities. Say goodbye to even more of the teachers, firefighters, sanitary workers, and police officers we depend on.
In July alone, state and local employment dropped 48,000. Not counting temporary census workers, the federal government shed 11,000. So with private payrolls increasing a paltry 71,000, July’s overall increase in payrolls was just 12,000.
12,000 new jobs in July — when 125,000 are needed monthly just to keep up with population growth, when more than 15 million Americans are out of work, and when more than a half million more state and local jobs are on the chopping block.
With the worst jobs crisis since the Great Depression worsening, you might expect emergency action out of Washington. But the biggest upcoming debate there is whether to extend the Bush tax cuts for the richest 2 percent, or for everyone, or for no one. This is like debating whether to get a mousetrap when your home is sinking in quicksand.
We need a response proportional to the crisis. Obama, Pelosi, and Reed should summon Congress back to Washington for action on the jobs emergency.First item on the agenda: establishing a federal bank that will provide states and locales zero-interest loans, to be repaid when their unemployment rates drop to 5 percent or below.
Second item: eliminating payroll taxes on the first $20,000 of all incomes and make up the difference by subjecting all income above $250,000 to the payroll tax. (Remember, the wealthy save most of their after-tax income, lower-income Americans spend it.)Third item: recreating the WPA to hire Americans directly. The Works Progress Administration put Americans back to work during the Depression rebuilding the nation’s infrastructure.
The jobs emergency requires no less.
Forty of America’s richest families or individuals – almost all billionaires – have pledged to donate at least half their fortunes to charity. The total is a whopping $125 billion. Warren Buffett and Bill and Melinda Gates reached out to some 80 members of the Forbes billionaires list, seeking their pledges.
I think it’s admirable that Bill and Melinda Gates and Warren Buffett give so much to charity and have corralled other billionaires to do the same.
But I’m also appalled at what this reveals about how much money is now concentrated in so few hands. It’s more evidence we’re back in the late nineteenth century when robber barons lorded over the economy and almost everyone else lost ground. The Vanderbilts, Carnegies, Rockefellers made so much money they too could give away large chunks to charity and still maintain their outsized fortunes and their power and influence.
Most telling is how much wealthier the richest have become over the past year. Forbes Magazine’s list of the world’s billionaires (40 percent of them Americans), show them with an average net worth of $3.5 billion – and an average increase of $500 million in the last 12 months.
America’s median hourly wage, meanwhile, dropped last year, and it continues to drop. That’s not even counting the 15 million Americans still out of work.
Most Americans don’t need charity. They need good jobs.
