Reprinted from Smirking Chimp
In fact, the "top line" unemployment number -- now 5.7 percent, representing 9 million people, does not factor in people who have given up looking, 6.8 million part-time workers who want to work full-time, 2.2 million "marginally attached" people, people who are grossly underpaid, etc. But everyone knows that, and the government reports that. The "official" number has a specific definition, the "U-6" alternative measure of labor under-utilization" reports the more accurate 13.5 percent number. So somewhere between 15 and 20 million Americans count as un- or under-employed. But even that doesn't count those who have given up. It's still bad out there, but the government's figures are not being manipulated.
Intentionally High Unemployment
I want to suggest that this high un- and underemployment is intentional. Here is why. Two things that the government could easily do right now would pretty much get rid of unemployment. But our government is blocked from doing those things by extremely wealthy people, who benefit from the low wages, and a desperate and "cowering" reserve army of unemployed status quo.
First, balancing the trade deficit would by itself bring back more than 5 million jobs. This is based only on the 3.1 million lost to the China trade deficit, 1 million lost to NAFTA and 900,000 lost to the Japan trade deficit. We also have trade deficits with Germany, South Korea, and others.
A way to visualize this is to imagine the effect on our economy of $500 billion of new orders coming in to businesses that make and do things inside the U.S. Then another $500 billion next year and every year after that. Our annual trade deficit is $500 billion. Fixing that means $500 billion of new business here, now, and continuing every year from now on. What you are visualizing is the damage this trade regime has done to us since Wall Street and the right's "free trade" ideology took over.
Second, we have deferred maintaining our infrastructure since the Reagan era started the cycle of tax cuts and spending cutbacks. To bring the country's infrastructure up to standards (never mind modernizing) we would need to spend $360 billion each year for 10 years, according to the American Society of Civil Engineers' Infrastructure Report Card. If you conservatively estimate that each $1 billion spent on infrastructure creates 30,000 jobs, $350 billion translates to 350 -- 30,000 = 10.5 million jobs.
So that's conservatively 15.5 million jobs if we just go back to doing what the country did before the Reagan era. (This gives you a hint at the damage Reagan's "trickle down" economics, and "free trade" market ideology have done. Look around. The extreme inequality that resulted tells you why it was done.)
Balance trade and fix up our aging infrastructure means at least 15.5 million jobs. (Think about what that would mean for wages, too.)
But That's Just Catch-Up
But those things are just playing catch-up. It comes close to giving jobs to the unemployed, part-time for economic reasons and "marginally attached" workers. It doesn't even start to dig into the people who have given up and left the labor market.
We got here by cutting taxes for the rich, gutting government, deferring maintenance, and letting a few billionaires harvest our public wealth through privatization, etc. We'll get out of it by fixing the trade deficit, repairing our infrastructure, undoing policy mistakes that have continued since the Reagan era, and ending "trickle down" tax cuts.
How do we take this a step further? The following things would employ tons of people and bring a long-term economic return far above any "cost."
First, retrofit buildings and homes to be energy-efficient. Start with the basics: plug leaks and drafts, paint roofs white. These simple things could employ tons of people who we call "low skilled." Take it a step further, and install energy-efficient windows, insulation, modern heating and cooling systems, solar on the roofs, etc. -- all made in America, of course -- and we will employ millions more. The energy payoff would be enormous, and we would go into the future with a much more efficient economy.
Next, engage in 21st century infrastructure projects like high-speed rail across the country and into Canada and Mexico -- just like China is already doing. (See: "New Silk Road.") We'll create jobs, and end up with a massively more efficient, competitive economy. Then, modernize our power grid and install wind turbines across the plains states. Again, we end up with a massively more efficient, competitive economy. Requiring American-made supplies boosts the return to our economy.
What about building our national, high-speed, fiber internet? Imagine the innovation that would result.
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Dave has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational (more...)