Jobs policy has to be key to full economic recovery

The U.S. Bureau of Labor Statistics recently released statistics on eleven cities where workers are disappearing.  Note that workers disappearing is different from jobs disappearing.  The latter means that employment is not to be found; the former is that employees are not to be found.  Generally jobs and workers are magnets to one another and a balance develops, even in particular local areas.  But both of these variables, jobs and workers, are dynamic and disparities will exist within a country as large as the United States.

As might be expected, the eleven cities where workers are disappearing include Rust Belt communities such as Cincinnati, Cleveland and Dayton, Ohio. Since November, 2007, Cleveland has lost 52,000 workers, or 5% of its labor force. Over the past four years, Cincinnati has lost 4 percent of its workers.


However, somewhat surprisingly, Phoenix and Tucson, Arizona are among these eleven cities with the greatest contraction of the labor force. Since 2007, Phoenix has lost 3 percent, and Tucson has lost 6 percent. In the Rust Belt cities, the primary reason is the decrease in manufacturing. In the Sun Belt cities of Arizona, the reason is that a huge housing bubble was created prior to 2007, and the recovery in the construction industry is still lagging.

If a worker cannot find employment in the community where he or she lives, three choices exist: (a) stay where one is living with the hope and expectation that employment opportunities will develop, (b) move elsewhere where jobs are  available, and (c) drop out of the labor force. The third option is one that more and more workers have been doing lately.  Some can afford to do this; others are just too discouraged to continue looking.

Communities such as Cincinnati, Cleveland and Dayton have had thousands of workers leave their boundaries and move elsewhere to find jobs. The impact on these communities can be good and bad: good in that it is no longer their responsibility to try to find jobs for as many unemployed, but bad in that the person who leaves is no longer a consumer in the community who provides helpful demand for goods and services.

Our federal government has the primary responsibility for setting policies that provide jobs and minimize unemployment. Because the government is so large, it inevitably will have a significant impact on the geographic distribution of the jobs. A question that could be ethical, but in reality is political, arises. Should the government try to provide job opportunities in those communities that have a large number of workers without jobs, or should it just provide the stimulus for new jobs with the expectation that the unemployed will gravitate to the locations where the jobs are.

Additionally, does the government have a responsibility to ensure jobs for all who want to work, even if some of the work that employees would do could better be done by robots or by workers living and plying their trades in another country? These dual forces of growing technology and an expanding amount of cheap labor overseas will not go away. They will remain as the twin reasons why employment opportunities in the U.S. will remain challenging.

It is not enough to say that the private sector will create the necessary jobs if given the opportunity to do so. Private companies are not in business to provide job opportunities, their raison d’etre is to make profit. If that can be done better by relying on technology and outsourcing jobs, they will do so. Society at large, and the federal government in particular, is left with dealing with the residue of American citizens who are looking for work but can’t find it.
[cincopa AQJARJrB4qWk]
The real answer is one that Franklin Roosevelt tried to implement during the New Deal – make the federal government the employer of last resort.  Yes, this is a form of socialism, but more importantly it is policy that is responsive to the needs of the American citizenry. It is not currently politically possible for President Obama to convince Congress to take the necessary steps to make this happen. But it would be extremely helpful to the American labor force if President Obama advocated such a policy at a time of his choosing. The current political climate may not be the best, but as he gets to the end of his presidency, he will have less political capital to preserve. If he is still reluctant to do so at any time over the next three and a half years, then it would be essential for him to do so as a former president who can feel far freer to advocate policies in which he truly believes than he can do now. Like many progressives, my support of President Obama is not only based on what he has done and what he is doing, but also what he is capable of doing in the future. I trust his political acumen; I just hope that he believes that the ultimate solution to our jobs program is for the federal government to be the employer of last resort.