Eight steps Congress can take to create more jobs
Is the United States resigned to just let market forces play themselves out, with the unemployment rate rising to whatever level it could? Or are there additional actions the U.S. Congress and state legislatures can take to stimulate job growth and create jobs? Indeed, there are measures legislators can enact. Below are a few:
1. Lower the capital gains tax to encourage more investment.
2. Pass a series of targeted, investment tax credits for high value-added sectors that are likely to be star performers in the U.S. economy over the next decade. The tax credits should stipulate that companies must retain most jobs added under the program in the United States.
3. Temporarily suspend the payroll tax, or at least consider giving small businesses more time to pay the tax on new hires, as a way of providing an incentive to hire.
4. Accelerate federal infrastructure programs and grants to states, where possible, to get as many infrastructure/construction workers employed as is reasonably possible during the next 12 months to 15 months. The goal is to increase demand from all pressure points to give the U.S. economic recovery more momentum.
5. Further extend both existing unemployment and food stamp programs: numerous studies have shown that dollars from both of these programs are spent quickly -- i.e. they create demand for goods quickly -- and demand for goods leads to jobs. In addition, increasing the modest unemployment stipend also would likely translate into a increased flow of dollars into communities.
6. Increase both student loan guarantees and grants for undergraduate/graduate study. Now is not the time to cut federal aid to higher education. On the contrary, Congress should be increasing aid to higher education -- community college level through four-year college level -- because, with so few job openings and so many applicants, millions more Americans will be returning to school.
Further, with that return to campus, the United States can make the best (new skills attainment) out of a negative (lack of jobs): now is a great time for millions of adult Americans to learn new skills, and, in some cases, to train for an entirely new career. The opportunity cost is very low.
Here's one example: a $500,000-plus unemployed mortgage bank executive returns to college for two years to add specialized skills to become a chief financial officer of a small- to mid-sized company. His focus: solar and wind energy companies and other greentech startups.
7. Congress could also increase specialized education grants to encourage the training of a whole new generation of mechanical engineers, electrical engineers, architects, scientists, chemists, physicists and teachers.
And did we mention health care reform? The states, perhaps with a partially matching federal grant, could increase state-level grants for medical students in training to be general practice physicians: we're going to need many more general practice physicians to treat those 30 million to 45 million additional adults regularly accessing health care services. That goes for nurses, as well.
8. Time to revive the CCC and WPA?
Finally, there also are larger, more-direct actions that Congress could take to increase employment, by resurrecting such agencies as the Civilian Conservation Corps (CCC) and the Works Progress Administration (WPA). There's plenty of work to be done in the nation and ample skilled and semi-skilled citizens willing to do it. Jobs would range from highly skilled professional positions in the engineering and architectural sciences, to more modest-skilled positions. Job tenures could be limited to 1 year to 2 years, or could extend for several years, depending on the project or mission.
However, regarding that last option, as of now, there doesn't appear to be sufficient political support for the CCC, WPA or comparable direct employment programs.
And let's hope public support and political pressure for the CCC and WPA remain low in the quarters ahead, because that means the nation's unemployment rate is falling.
Financial Editor Joseph Lazzaro is writing a book on the U.S. presidency and the U.S. economy.