Obama is not taking unemployment seriously

Reuters

US President Barack Obama (center R) is greeted as he looks at building supplies while touring Erickson Construction in Chandler, Arizona, August 6, 2013.

Article Highlights

  • The unemployed workers listening to the president's speech must have been very disappointed.

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  • We need a short-term plan to address the immediate problem of unemployment, particularly unemployment spells that last for over six months.

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  • Well. If I had been out of work and searching for a job for the last 7 months, then I'd sleep better after having heard this plan.

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President Obama's address at Knox College was billed as "an important speech on the economy," so I was expecting an important speech on the economy -- one that included a serious discussion of, and proposed solutions for, the country's most immediate economic problem: unemployment. As it happened, the president mentioned the word "unemployment" only once. Instead, the president chose to focus his speech on the long-term problems of the sainted middle class.

The unemployed workers listening to the president's speech must have been very disappointed. Imagine if you had spent week after week after week -- or, for the over four million of our fellow citizens who are long-term unemployed, month after month after month -- trying to find a job, but haven't succeeded. Here comes the president of the United States, delivering a major speech on the economy, and he spends next to no time on your dire situation.
 
Argued the president: "What we need is not a three-month plan, or even a three-year plan; we need a long-term American strategy, based on steady, persistent effort, to reverse the forces that have conspired against the middle class for decades. That has to be our project."

The problems of the middle class are on a slow-burn, driven by changes decades in the making, and the president is of course correct that we need a long-term strategy to cope with these changes and to help sustain a vibrant middle class. And some, though not all, of the president's proposed long-term solutions to help the middle class are good ideas.

But the president is wrong that we don't need a short-term plan. We do. We need a short-term plan to address the immediate problem of unemployment, particularly unemployment spells that last for over six months. Of all the economic problems facing the country right now, this is the one that deserves presidential attention. Or, at a minimum, it deserves more than passing presidential attention.

The Knox College speech was a speech about future speeches, including but not limited to jobs. At an Amazon.com factory in Chattanooga, Tennessee, six days later, the president's speech focused specifically on jobs. And he did mention long-term unemployment. For five sentences.

The president acknowledged the need to "do more to help the more than 4 million long-term unemployed Americans that are out there." "One of the problems is a lot of folks," said the president, "they lose their jobs during this really bad recession through no fault of their own. They've got what it takes to fill that job opening, but because they've been out of work so long employers won't even give their application a fair look."

The president's solution? "So I'm challenging CEOs to do more to get these Americans back on their feet. And I'm going to bring together the CEOs and companies that are putting in place some of the best practices for recruiting and training and hiring workers who have been out of work for a long time, but want the chance to show that they're ready to go back to work."

Well. If I had been out of work and searching for a job for the last seven months, then I'd sure be sleeping better after having heard this plan.

The "long-term American strategy" the president laid out for middle class jobs is not up to the challenge of significantly helping those who are currently unemployed. (This is unsurprising, since it's not designed primarily for today's unemployed.) The president called for more infrastructure spending, creating 45 new "Manufacturing Innovation Institutes" (?), investing in community colleges, encouraging foreign firms to create jobs in the United States, and increasing exports, among similar policies. And, of course, the president fell back on some old staples: raising the minimum wage, engaging in industrial policy to support manufacturing jobs, and increasing investment in clean energy research.

We can do better than this. There are steps the government can take to help today's unemployed: Offering relocation vouchers to the long-term unemployed in high-unemployment areas; allowing firms to hire the long-term unemployed at less than the current minimum wage and supplementing their income with an EITC-like payment; reforming our disability insurance program so that it doesn't serve as a permanent exit from the labor market; publicizing and encouraging worksharing as an alternative to layoffs; getting the government off the backs of entrepreneurs; reducing occupational licensing requirements; encouraging domestic energy production; providing lump-sum bonus payments to unemployed workers who find a job; and more. Some of these suggestions involve more government action; some involve the government getting out of the way; all should be considered.

"For most of the past two years," argued the president, "Washington has just taken its eye off the ball when it comes to the middle class." Really, Washington has taken its eye off the ball when it comes to the unemployed.

Instead of -- or at least in addition to -- spending time and energy on a "long-term American strategy" to help the middle class, the president needs to focus on helping today's unemployed. We've heard quite enough about green energy jobs for tomorrow's middle class. We need to hear more about how the government will meet its responsibility to those among us who are in most need of help. In fact, we need more than words. We need action.

Michael R. Strain is a resident scholar at the American Enterprise Institute.  Follow him on Twitter @michaelrstrain.

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About the Author

 

Michael R.
Strain
  • Michael R. Strain is a resident scholar at the American Enterprise Institute, where he studies labor economics, public finance, and applied microeconomics. His research has been published in peer-reviewed academic journals and in the policy journals Tax Notes and National Affairs. Dr. Strain also writes frequently for popular audiences on topics including labor market policy, jobs, minimum wages, federal tax and budget policy, and the Affordable Care Act, among others.  His essays and op-eds have been published by National Review, The New York Times, The Weekly Standard, The Atlantic, Forbes, Bloomberg View, and a variety of other outlets. He is frequently interviewed by major media outlets, and speaks often on college campuses. Before joining AEI he worked on the research team of the Longitudinal Employer-Household Dynamics program and was the manager of the New York Census Research Data Center, both at the U.S. Census Bureau.  Dr. Strain began his career in the macroeconomics research group of the Federal Reserve Bank of New York.  He is a graduate of Marquette University, and holds an M.A. from New York University and a Ph.D. from Cornell.


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