Government's claim of job growth
Though the government claims that the economy is slowly improving, many people are still out of work. People who are adamantly looking for jobs are hoping that one day they will hear the hopeful words of “You’re hired.” Despite this, many politicians claim that the economy is improving and new jobs are being created. If this is so, why are there so many people out of work?
In November 2010, the unemployment rate in America has risen to 9.8 percent. That is equivalent to 15.1 million Americans that are out of work (Bureau of Labor Statistics (BLS, 2010).
Contrary to this, the Labor Department states that in 2010 employers added 151,000 new jobs (BLS, 2010). Many may look at this as a step in the right direction. But it is meaningless to the people who still struggle to find work and are unable to support themselves.
It is good that the government will extend unemployment benefits throughout this year. While the extension may be a temporarily cushion for those who are unemployed, the funding will soon be depleted. Then the government will have to go back to deciding whether they should provide further relief to the unemployed or not.
Experiences of the unemployed
Those that are searching for jobs are often unsuccessful because many companies are not currently hiring. Or if companies are hiring, people are often told that they are overqualified or not experienced enough.
After hearing many answers like this, many people grow weary and some even give up on looking for jobs. The unemployed who are fortunate to have social support systems (family, friends, etc), are able to use the time off to further their education, learn another skill, and make connections. Others who are not as fortunate will have to remain unemployed until they can find someone that will hire them.
Possible solutions to the recession
Some economists believe that the job market will not increase until 2012 or later. If this is true, the American society must find ways to create new jobs.
One possible solution to this problem was to establish a timely fiscal policy according to economist Alan D. Viard. In his article, "Tax policy during the Recession: The role of fiscal stimulus", Viard says that, "the stimulus debate should supplement, rather than replace, the quest for long-run growth. To that end, tax policy should be oriented to tax consumption rather than saving. It should also keep marginal tax rates as low as reasonably possible. As we address the current economic calamity, let's also adopt policies that will continue to enable each generation to attain a higher standard of living". Viard is essentially saying that if government chooses to use a fiscal policy that will stimulate they should do it in a responsible way. He is also saying that the government should not just rely on the stimulus plan to boost job growth but use other techniques as well.
One question that Viard proposal does not answer is that how will the stimulus plan affect corporations that are outsourcing jobs overseas? According to the AFL-CIO, for the past 10 years, "the nation has lost more than 2.5 million manufacturing jobs and more than 850,000 professional service and information sector jobs. No one knows for sure how many of these jobs have been lost due to increased import competition and shifts in production abroad, since no comprehensive official data are collected. Various independent estimates indicate the number of white-collar jobs lost to shipping work overseas over the past few years is in the hundreds of thousands and millions are at risk in the next five to ten years".
One way that the government can effective restore jobs is to make laws that regulate the ways that companies outsource jobs. One attempt that the government made to do this was in 2010 when the Stop Outsourcing and Create jobs Act was introduced (Congress bill, 2010). In order to prevent companies from outsourcing, the act stated that the government will enact penalties on corporations that did this. If this act was enacted, companies will work to create jobs at home rather than over seas because it will be more cost affective.
Conclusion
There appears to be only two possible solutions to creating job growth. One is to enact a fiscal policy that will encourage job growth. The second is to create laws that will force companies to create jobs at home rather than overseas. Nevertheless, while the government and businesses debate about responding to the economy, the people bare the major brunt of the recession. The leaders should not ignore this.
Sources
US. Bureau of Labor and Statistics
Vaid, Alan D. (2009) Tax Policy during Recession
AFL-CIO Website Exporting America
Stop Outsourcing and Create Jobs Act
Renneth Grey - I am a freelance journalist/writer that is dedicated to spreading awareness and growing more as a writer.
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