If you’re like me, you’ll be watching President Obama on television Thursday night as he outlines his new plan to get America back to work.
And, like me, you’ll be wondering if any of his proposals stand a chance of actually making much of a dent in the nation’s massive, 9.1-percent unemployment rate.
Helpfully, a group of economists and analysts at the Economic Policy Institute (EPI) released a set of four criteria that we at home can use as sort of a scorecard to see how the president’s jobs plan stacks up (or anyone else’s, for that matter.)
For the 14 million jobless Americans, Obama’s speech and the job-creating measures he puts on the table won’t merely be some abstract political exercise or campaign stunt.
They could be the unemployeds’ last, best hope of finding a new job any time soon.
As the folks at EPI say in their new report:
A renewed emphasis on job creation is desperately needed. The unemployment rate has been at roughly 9% or above since the spring of 2009. Among black and Hispanic workers, nearly one in four is unemployed or underemployed in a typical month. Unemployment has doubled since 2007 for each educational group, including college graduates and workers with advanced degrees. Polling shows that more than 40 percent of families have been directly affected by unemployment in the last year, a condition that has prevailed since June 2009.
With that sense of what’s at stake, let’s go straight to how you should grade the president’s proposals.
Criterion One: Will the policy make a real difference in
job creation in the next 24 months?
This criterion is crtical because the labor market needs a jolt that is both quick and sustained. As the EPI folks note, many of the job-creation proposals floated in recent weeks and months — such as free-trade agreements, patent reform, and deficit-reduction — won’t produce jobs in the near term. The nation needs to start creating lots of new jobs — and fast.
Criterion Two: Is the policy effective and efficient?
Simply put, this one is all about doing those things that will give us the most bang for the buck.
“We know from the Congressional Budget Office, academic experts, and private-sector forecasters what are the most effective policy tools for generating jobs,” the report says.
Criterion Three: How is the policy funded?
This criterion will be crucial considering Washington’s recent penchant for reigning in the federal budget deficit because the most effective job creation policies cannot be “paid
for” by higher taxes or other spending cuts in the near
term, the EPI report says:
Effective jobs policy injects money into the economy
and increases the overall demand for goods and services, thereby raising the need for more workers to produce those goods and services. But if a job creation policy must be “budget neutral”— that is, it must be accompanied by a tax increase or budget cut—then the benefits of the spending injected in the economy are diluted at best. Simultaneously offsetting stimulus spending is simply not feasible given the magnitude
of economic support needed for such spending to be
effective. So, an effective jobs plan should either be deficit-financed or paid for in later years only after the economy is much stronger and has much lower unemployment.
Criterion Four: Is the policy at the appropriate scale to produce a substantial number of jobs?
This last criterion is all about doing enough big things to jumpstart the sluggish economy in such a way to create enough jobs quickly to start putting enough of the nation’s jobless back to work to really bring down the persistently high unemployment rate.
“Proponents of jobs plans should set clear goals regarding the extent to which unemployment will be reduced over the next two years,” the EPI report adds.
Only if Obama (or any of his Republican rivals) can meet these basic tests with their competing jobs plans can we be confident our economy finally may be on an upswing.