Tuesday, August 25, 2009

Time to bring back the WPA.

As we have mentioned here several times recently, the official number of jobs lost so far in this "Great Recession" is about 6.5 million, but the real number of unemployed plus those who are involuntarily underemployed (part timers, etc.) is around 12 million now, and growing by around half a million per month. Where are we going to find jobs for all these people? No one in government has made even a faint and half-hearted suggestion as to where these people are going to find full time living wage employment. When broken down by age groups, the unemployment figures look even more unsettling.

Bernanke: "Do you have the cojones to raise rates?"
By Mike Whitney
Tuesday, 25 August 2009

[FYI: This editorial actually covers a great deal of the ground we have been discussing lately, and the part concerning unemployment which I am excerpting for you here is somewhat near the bottom.]

..."The economy is in a shambles". That's from the horse's mouth [Warren Buffet]. Inventories are down 11 percent year-over-year, durable goods are down 10.4 percent y-o-y, industrial capacity is at record lows, manufacturing is still contracting, housing is in the tank, shipping and rail freight are scraping the bottom, retail is in a long-term funk, and--according to Krugman--the slight dip in unemployment was a statistical anomaly. Here's Bob Herbert's great summary of the unemployment data:

"Some 247,000 jobs were lost in July, a number that under ordinary circumstances would send a shudder through the country. It was the smallest monthly loss of jobs since last summer. And for that reason, it was seen as a hopeful sign. The official monthly unemployment rate ticked down from 9.5 percent to 9.4 percent....The country has lost a crippling 6.7 million jobs since the Great Recession began in December 2007...

The percentage of young American men who are actually working is the lowest it has been in the 61 years of record-keeping, according to the Center for Labor Market Studies at Northeastern University in Boston. Only 65 of every 100 men aged 20 through 24 years old were working on any given day in the first six months of this year. In the age group 25 through 34 years old, traditionally a prime age range for getting married and starting a family, just 81 of 100 men were employed.... The numbers are beyond scary; they’re catastrophic.

This should be the biggest story in the United States. When joblessness reaches these kinds of extremes, it doesn’t just damage individual families; it corrodes entire communities, fosters a sense of hopelessness and leads to disorder....

A truer picture of the employment crisis emerges when you combine the number of people who are officially counted as jobless with those who are working part time because they can’t find full-time work and those in the so-called labor market reserve — people who are not actively looking for work (because they have become discouraged, for example) but would take a job if one became available.

The tally from those three categories is a mind-boggling 30 million Americans — 19 percent of the overall work force.

This is, by far, the nation’s biggest problem and should be its No. 1 priority.("A Scary Reality" Bob Herbert, New York Times)

Sorry, Bob, the media has no time for unemployment news. It tends to undermine the positive vibes from green shoots stories...

Our country has two birds that can be killed with one stone: the jobs problem and the need for development of a comprehensive European-style rail mass transit system. The answer is excruciatingly obvious: Bring back the WPA.

The WPA was a non-profit style government construction and engineering project that employed millions of citizens during the Depression era. The WPA built many of the highways, bridges, dams, and other infrastructure that we depend upon today.

Now the WPA can build dedicated passenger rail lines to provide either commuter, regional, or high speed rail to every city in the US with at least 50,000 people. Smaller towns would get a commuter line to a larger regional hub. The regional rails would be circulator routes between the large cities of a given region. And, of course, the high speed corridors would be between major metropolitan areas. The WPA could even install trolley lines for smaller towns and/or inter-urbans to reach the nearest commuter or regional line.

Unlike the massive boondoggles to AIG and other fat-cats, this type of project would actually bring positive effects to ordinary households in two ways - one, providing direct employment (of course) and two, lowering transportation costs by making car ownership (and the taxes, gasoline, insurance, etc. that go with it) optional instead of mandatory. The idea of electric cars is nice in theory, but in real life we are nowhere near having sufficient electric production to make this possible. And, of course, biofuels are a pipe dream that take more than a gallon of petroleum inputs to produce a gallon of biofuel - not to mention it would take every square inch of arable land in the US to provide fuel for all the automobiles on the road today, much less in 20 years. European style mass transit is the only real and viable option for a sustainable economy (presuming you consider eating high on your priority list, that is).

If anyone else has a viable idea of what to do with 12 million unemployed and underemployed people, we haven't heard it - nor will we. The fact is, there are no industries gearing up that have that kind of possible manpower needs. We're paying these people to sit and do nothing via unemployment benefits - why not pay them to do something useful instead? Bring back the WPA, Obama. You're supposed to be on the side of the little guys, remember? - not the fat cat CEOs.

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