With rising unemployment stymying the president’s economic revival plans, the Obama administration is huddling with business leaders, academics and other experts Thursday to find a way to jumpstart hiring.
Some 130 people will gather for the afternoon jobs summit at the White House on the eve of the government’s November unemployment report. The nation is expected to have lost another 114,000 jobs, with unemployment remaining at 10.2%, the highest in 26 years, according to an economists’ survey.
The employment picture is certainly grim. Nearly 16 million Americans are out of work, one-third of whom have been unemployed for more than six months. There are now six workers competing for every job vacancy.
President Obama and some lawmakers are searching for a way to stem this unrelenting loss of jobs, which is casting doubt on effectiveness of many of his economic programs, from his $787 billion stimulus plan to his $75 billion foreclosure prevention initiative.
“We are going to be bringing together people from all across the country … to explore how we can jumpstart the hiring that typically lags behind economic growth, but we don’t want to wait,” Obama said last week.
Invited executives include Google CEO Eric Schmidt, Disney chief Bob Iger, Boeing head James McNerney and AT&T’s Randall Stephenson. Also expected are United Steel Workers president Leo Gerard, San Antonio Mayor Julian Castro, former Fed vice chairman Alan Blinder and Paul Krugman, the Nobel Prize-winning economist and New York Times columnist.
The guests will also include small business owners, academics and non-profit leaders.
On the schedule are discussions on green jobs, small business employment, infrastructure and exports. Also, breakout groups will look at ways to encourage business competitiveness and to better prepare workers for the economy of the future.
The discussions will be led by top administration officials, including Treasury Secretary Tim Geithner, National Economic Council Chairwoman Christina Romer, Labor Secretary Hilda Solis and Energy Secretary Steven Chu. Obama will make opening and closing remarks.
There’s no shortage of job growth proposals being bandied about. Though all sides agree that rising unemployment must be addressed, the solutions run the gamut. Some left-leaning economists and politicians are pushing for another round of stimulus, while their conservative counterparts are calling for tax breaks, such as a hiring credit for companies who add to their payrolls.
Indicative of just how contentious job creation is, House Republicans are holding an alternate roundtable on Thursday to discuss what they call the administration’s “job-threatening” policies.
“From the Obama administration, which produced a trillion-dollar ‘stimulus’ that didn’t create jobs “immediately” as promised, comes a “jobs summit” that won’t actually help create jobs,” said House Republican Leader John Boehner, R-Ohio. “Now more than ever, America needs more jobs, not more debt.”
Just how much Washington can do to boost hiring remains to be seen.
The administration and Congress are tied up with health care reform and foreign policy issues. And their ability to institute new programs will be hampered by the nation’s record budget deficit.
Though experts say the economy is recovering, they don’t expect jobs to return anytime soon. The National Association for Business Economics pushed recently pushed back their expectations for when companies will start adding positions to mid-2010. They previously had predicted a gain of 12,000 jobs a month in the first quarter.
Some of the leading ideas under discussion include:
- offering a payroll tax holiday, which would temporarily suspend the 12.4% tax on workers’ first $106,800 of wages;
- creating a new jobs hiring credit;
- giving more money to states and localities to close budget deficits. These shortfalls could cost 900,000 jobs in 2010 alone, according to one think tank;
- and offering public-service employment.
One measure that is more likely to be enacted is an extension of unemployment benefits. One million people could lose unemployment benefits in January if Congress doesn’t lengthen the deadline to apply for federal aid beyond Dec. 31, according to the National Employment Law Center.
This week, two groups at opposite ends of the political spectrum offered a bevy of suggestions on how to spur job creation.
The U.S. Chamber of Commerce on Monday sent a letter to the president with seven policies that it said are crucial to job creation. Its suggestion include expanding infrastructure investment by removing regulatory and other requirements, as well as better preparing American students for future jobs and lowering tax rates on entrepreneurs.
“While the government can help support some jobs in the short run, the only way to meet this challenge over the long term is through a vibrant and dynamic free enterprise system,” Thomas Donohue, the chamber’s president.
The Economic Policy Institute, on the other hand, supports more government spending on transportation infrastructure and school buildings, as well as the creation of one million public service positions.
The labor-supported group, which released a five-point plan Monday that it says will create 4.6 million jobs in its first year, also supports extending unemployment benefits and health insurance subsidies. And it wants to see the president and lawmakers send more funds to state and local governments and create a hiring credit.
“Some people have questioned whether we can afford to do more to create jobs, but they’ve got it backwards,” said Lawrence Mishel, EPI’s president. “We can’t afford not to do more.
Via: CNN Money.com