How To End Unemployment

Alongside Friday’s good employment data, there is a brouhaha on the Internets over claims that the government’s employment numbers are a “big lie.” Jim Clifton, Chairman and CEO of the Gallup polling company penned “The Big Lie: 5.6% Unemployment,” claiming that “the media” is “cheer-leading” and the White House is “scor[ing] political points” over phony numbers that the government makes up to make things look better than they are.

In fact, the “top line” unemployment number – now 5.7 percent, representing 9 million people, does not factor in people who have given up looking, 6.8 million part-time workers who want to work full-time, 2.2 million “marginally attached” people, people who are grossly underpaid, etc. But everyone knows that, and the government reports that. The “official” number has a specific definition, the “U-6 “alternative measure of labor under-utilization” reports the more accurate 13.5 percent number. So somewhere between 15 and 20 million Americans count as un- or underemployed. But even that doesn’t count those who have given up. It’s still bad out there, but the government’s figures are not being manipulated.

Intentionally High Unemployment

I want to suggest that this high un- and underemployment is intentional. Here is why. Two things that the government could easily do right now would pretty much get rid of unemployment. But our government is blocked from doing those things by extremely wealthy people, who benefit from the low wages, and a desperate and “cowering” reserve army of unemployed status quo.

First, balancing the trade deficit would by itself bring back more than 5 million jobs. This is based only on the 3.1 million lost to the China trade deficit, 1 million lost to NAFTA and 900,000 lost to the Japan trade deficit. We also have trade deficits with Germany, South Korea, and others.

A way to visualize this is to imagine the effect on our economy of $500 billion of new orders coming in to businesses that make and do things inside the U.S. Then another $500 billion next year and every year after that. Our annual trade deficit is $500 billion. Fixing that means $500 billion of new business here, now,  and continuing every year from now on. What you are visualizing is the damage this trade regime has done to us since Wall Street and the right’s “free trade” ideology took over.

Second, we have deferred maintaining our infrastructure since the Reagan era started the cycle of tax cuts and spending cutbacks. To bring the country’s infrastructure up to standards (never mind modernizing) we would need to spend $360 billion each year for 10 years, according to the American Society of Civil Engineers’ Infrastructure Report Card. If you conservatively estimate that each $1 billion spent on infrastructure creates 30,000 jobs, $350 billion translates to 350×30,000 = 10.5 million jobs.

So that’s conservatively 15.5 million jobs if we just go back to doing what the country did before the Reagan era. (This gives you a hint at the damage Reagan’s “trickle down” economics, and “free trade” market ideology have done. Look around. The extreme inequality that resulted tells you why it was done.)

Balance trade and fix up our aging infrastructure means at least 15.5 million jobs. (Think about what that would mean for wages, too.)

But That’s Just Catch-Up

But those things are just playing catch-up. It comes close to giving jobs to the unemployed, part-time for economic reasons and “marginally attached” workers. It doesn’t even start to dig into the people who have given up and left the labor market.

We got here by cutting taxes for the rich, gutting government, deferring maintenance, a and letting a few billionaires harvest our public wealth through privatization, etc. We’ll get out of it by fixing the trade deficit, repairing our infrastructure, undoing policy mistakes that have continued since the Reagan era, and ending “trickle down” tax cuts.

How do we take this a step further? The following things would employ tons of people and bring a long-term economic return far above any “cost.”

First, retrofit buildings and homes to be energy-efficient. Start with the basics: plug leaks and drafts, paint roofs white. These simple things could employ tons of people who we call “low skilled.” Take it a step further, and install energy-efficient windows, insulation, modern heating and cooling systems, solar on the roofs, etc. — all made in America, of course — and we will employ millions more. The energy payoff would be enormous, and we would go into the future with a much more efficient economy.

Next, engage in 21st century infrastructure projects like high-speed rail across the country and into Canada and Mexico — just like China is already doing. (See: “New Silk Road.“) We’ll create jobs, and end up with a massively more efficient, competitive economy. Then, modernize our power grid and install wind turbines across the plains states. Again, we end up with a massively more efficient, competitive economy. Requiring American-made supplies boosts the return to our economy.

What about building out national, high-speed, fiber internet? Imagine the innovation that would result.

There is so much we could do to first bring about full employment, and then move our economy into the 21st century. But we are held back by this weird Reagan/Wall Street/conservative ideology that tells us not to believe that We the People deserve a government that spends to make our lives better. That spending boosts us up now, makes our lives better, and more than pays for itself later. But we are kept from dreaming and doing because that return on our investment would go to us, instead of into the pockets of a few billionaires.

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progress Breakfast.

One thought on “How To End Unemployment

  1. I’m going to stop reading this blog. You have literally left reality.
    There is nothing that matters one whit in what you write. It is total waste. Increase production? With what coal powered plants, gas powered plants or nuclear plants?

    It has probably escaped your notice but the fucking planet is burning up. The ice caps are melting. There is not going to be a single solitary place in 10 years where food can be planted and harvested outside reliably.

    The end of all living species is staring mankind right in the face and you feel that building useless infrastructure, increasing production, painting house roofs white will make any kind of positive reaction?

    The cities have to shrink, be destroyed and then moved inland. All of their waste has to be neutered. Almost all chemical, fertilizer and magic bean plants must be shuttered. The oceans are gone. When the sea rises, and it will as sure as twice two is four, the people have to be inland.

    We are at a crisis and it has not one single tiny thing to do with what you obsess about. Manufacturing what? 400 new nuclear plants? We have three critical situations in nuclear power now. Fukushima. The growing disaster of Hanford. The super designed new storage facility in New Mexico which is faking worse on a weekly basis. Total fucking disasters that aren’t reported in the 95 percent of MSM that is owned by 6 corporations owned by the filthy rich

    You need to get up to speed on reality.

    Three suggestions: These are not cranks.

    http://www.alternet.org/environment/former-chairman-nuclear-regulatory-commission-says-every-single-reactor-us-should-be

    From truthout 1/13/15:

    Paul Beckwith, a climatology and meteorology professor at the University of Ottawa, Canada, is an engineer and physicist who researches abrupt climate change in both the present day and in the paleoclimatology records of the deep past.

    “It is my view that our climate system is in early stages of abrupt climate change that, unchecked, will lead to a temperature rise of 5 to 6 degrees Celsius within a decade or two,” Beckwith told me. “Obviously, such a large change in the climate system will have unprecedented effects on the health and well-being of every plant and animal on our planet.”

    Unchecked? Not a fucking hope by the KnowNothings elected in the US last fall nor the almost total collapse of the Lima climate talks. Nothing was accomplished. Absolutely nothing expect, the indiginees that demonstrated, showed they know climate change is happening rapidly as high farms have to move up 50 meters per year to yield anything.

    I have no idea of how well McPherson is updating this. All climate models of five years ago are wrong in the wrong direction. I personally think McPherson is an insane optimist:

    http://guymcpherson.com/2013/01/climate-change-summary-and-update/

    Drop the unemployment, trade balance horseshit and concentrate on covering the destruction of an entire ecosphere. $400 billion in manufacturing consists of a total loss unless it is in renewable energies and not the tin can cars. I can accomplish more by recalling the US military forces to the United States and parking them with no updates. They waste more fuel than any other organization on earth, including the ROC and their military. Just park the crap.

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