In a $2 trillion economy, spending $12 billion to ease the hardships of recession-induced job losses would seem like an easy assignment for a government that routinely dispenses some $600 billion each year. And it would be -- if all that was required was adding a few dollars here and there to the millions of checks the federal government routinely mails to age, disabled and other needy persons or transfers to state and local governments. But that is not what the jobs plank by the Democratic National Convention calls for. What it requires is the far harder task of creating and operating programs to reduce joblessness now and, presumably doing this in a way that is not only timely but also directed at those hardest hit and least likely to benefit from indirect anti-recessionary measures such as a tax cut. It needs, in addition, to be effecient in terms of jobs produces per dollar spent and should not place a potentially inflationary mortgage on future federal budgets.
So far, the Carter administration has deferred consideration anti-recessionary measures until the shape and duration of the recession become clearer. Nonetheless, tucked away in the recesses of every well-run bureaucracy there is always someone cranking out unread and unwanted plans for every contingency from a Martian invasion to a world-wide shortage of paper clips. As one of the most frequent designees for such duty in the Labor Department (concerning jobs, not an attack by the Empire), I offer the following possibly helpful hints to any administration or congressional planners who may find themselves trying to fulfill this platform pledge:
Don't insist it all be "new" money. Not only is it inconceivable that Congress,still bloody from the budget battle of last March, will now add $12 billion to next year's budget, but speeding up or geographically redistributing existing program dollars can actually be far more successful. That way, congressional authorization and appropriation fights can be avoided and the program is much more likely to get started. Indeed, a lot of the things that. Kennedy is calling for are already on line. For example, prompt congressional action on the administration's $12 billion youth employment initiative would more than meet Kennedy's demand in this area.
Pay attention to the particular characteristics of this recession. So far, at least, it is very much a "blue-collar" recession, both in terms of the geographic areas it is affecting andthe types of workers it is hitting hardest. Comparing June and July, the last two months for which data are available, the national unemployment rate held pretty much constant while unemployment rose sharply in such older industrial states as Illinois and Pennsylvania and was already at near depression levels inMichigan and Ohio. This means that in other large areas of the country unemployment actually declined and in some key states, such asCalifornia, New Jersey and Massachusetts, it isn't much higher than it was a year ago when the economy was booming.
Recognize the need for some measure of simple income maintenance as the most efficient way of maintaining puchasing power on their own as the economy recovers. The administration has already requested over one billion additional dollars to finance trade adjustment benefits for laid-off workersin the automobile and other heavily affected industries. Over $4 billion more has been requestedjust to cover the additional load that the recession will place on existing unempolyment compensation programs. And still many thousands of workers will exhaust their benefits in the face of extremely bleak prospects for reemployment. The wholesale extension of unemployment benefits that the federal government finances in the 1974-75 recession drew a lot of criticism not only because of its price tag, but because it spent a fair amount of its resources on people who weren't really its intended beneficiaries -- such as retirees, persons working only temproarily and school employees during summer vacation. A more suitable program for this recession might provide federally financed extended benefits, but only to those states in which unemployment is well above normal levels and to workers with substantial and continuing labor force attachment.
Remember that, while the sick economy will recover generally, some of its symptoms aren't going to fade away. When the auto industry regains a sound financial and technological footing, many analyst believe that it and its associated suppliers will have permanently lightened their payrolls by over 200,000 workers from their 1978 peak. Steel is anotherbasic industry likely to be slated for permanent shrinkage, at least if it is to avoid becoming a permanent ward of the taxpayer. This suggests that any jobs package should emphasize getting other projects going that are already onthe drawing board. prime candidate is thedevelopment program for synfuels and other energy sources that already has $1.5 billion inhand for spend over the next few years. This would provide at least a partial replacement for basicjob losses and a creative way of using the idled skills, community resources and supporting industrial base that will otherwise be wasted or ultimately reconstructed at huge social and financial cost.
As for direct job creation, both experience and analysis have demonstrated that it can be a fast, economical and non-flationary way of providing jobs to the unemployed.But since the days of WPA, such programs have evoked public images of workers leaning on shovels (even if somehow they managed miraculously to build LaGuardia Airport in the process). As long as the recession retains its concentrated characteristics, a wholesale national expansion of job programs is neither suitable nor salable to Congress.
What might make sense would be to do these things: First, try to create jobs that do double duty. Some obvious candidates are weatherization and other types of energyconservation, rehabilitation of low-income housing, day care for children of low-income, working parents and in-home care for the elderly.
Next, set aside a portion of the jobsstrictly for maintenance of essential services inthose communities where local revenues have been decimated by the recession. A nationalexpansion of unrestricted revenue sharing has not only been a proven loser on the Hill, but it won't do the job -- not only because most of the money will go to communities in relatively healthy financial shape, but because esperience from the last recession shows that many communities will earmark the money for long lead-time projects and, in somecases, actually delay local expenditures while plans are developed for the more ambitious profects now possible.
Finally, make a down payment on some long-term goals of employment policy, like helping welfare families achieve economic self-sufficiency and attacking the chronic problem of inner-city youth who lack both job skills and job opportunities. These may not be the first groups hit by this recession, but they will surely be the ones for whom the effects will be most enduring.
Remember that a recession is a propitious time to invest in building a better labor force for the future. During the next decade, we will experience important changes in the demography of the population as well as in the structture of labor demand. Aready we may be facing a critical shortage, of certain types of skilled workers -- machinists, tool and dye makers, pipe fitters and the like -- if we are to undertake a major retooling of some of our basic industries and support the development of high technology growth sectors necessary to restore our leadership in the world market. Training skilled workers requires access to expensive captial equipment and experienced instructors. A period of slack demand can make both available, and a cooperative effort among government, labor and industry can provide the opportunityto retrain workers whose skills have becomeobselete and to open up good paying jobs to thousands of workers who will otherwise be consigned to work well below their productive potential.
Twelve billion dollars spent on the standard remedies of bygone days may, at best, accomplish little of demonstrable value and, at worst, even aggravate some of our long-term economic problems. But, spent wisely, even a considerably smaller sum could constitute an important investment in improving both our potential for economic growth and the fairness of the way in which its benefits are distributed.