Jobs, policy and politics

Business Week Online has this: “Jobs: Desperately Seeking Answers,” subtitled “Employment and the economy are both parties’ issues — and both parties are pushing plans that are flawed”

Good summary of Bush and Kerry proposals and political urgency of the jobs issue under present circumstances.

Presidential candidates have their ears to the ground, and what they hear is a rumble of fear about the slow recovery in employment. A Feb. 9-12 Gallup Poll found that 41% of Americans view jobs or the sluggish economy as their top concerns — three times the number for either the war in Iraq, terrorism, or the spiraling cost of health care. . . .

Economists of all stripes agree that neither Bush’s let-’em-eat-tax-cuts stimulus plans nor the Democrats’ proposals — built around targeted tax breaks and a crackdown on trade — are likely to lift the trend line for employment much anytime soon. Even in the long term, the parties’ differing approaches are more likely to affect the mix of jobs more than the number. . . .

Faced with Bush’s policies and the Democratic Rx, voters have “a choice between atrocious fiscal policy paired with pretty bad trade policy, vs. pretty bad fiscal policy and atrocious trade policy,” says Everett M. Ehrlich, director of research for the business-backed Committee for Economic Development. So the agenda of both parties could crimp growth. . . .

Bush’s proposal to lock in lower tax rates threatens to balloon the deficit — already expected to hit $521 billion this year — even further. That would hasten the day when bond-market investors demand higher interest rates, thus slowing the economy. And Democrats’ trade restrictions, if carried out, could curb imports and raise prices for U.S. consumers — an economic effect that would quickly outweigh any benefit from added wages earned by workers in protected jobs.

In short, the impact of the two parties’ policies is unlikely to be much different — or address workers’ anxiety. “We ought to be paying more attention to the costs that are being imposed on individual workers,” argues Peter R. Orszag, an economist at Washington’s Brookings Institution who has advised Democratic candidates. For example, neither party has endorsed such ideas as wage insurance — extra pay from unemployment-insurance funds to soften the blow of accepting a lower-salaried job.

Much more, especially details on Democratic proposals, in full article here.

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Posted by George Lenard

on March 1, 2004

General