Jobs: The Thorny Truth
I received an angry e-mail from a CBS Evening News viewer after my appearance with Anthony Mason last night. The writer said that I was an apologist for the Obama Administration, which seems far-fetched since I've been writing critical pieces about the way the White House has handled the economy for about a year. But when the topic is jobs, Americans are anxious, uptight and downright mad. Last night, I tried explain what impact the new $15 billion jobs bill might have on employment.
One thing I should have mentioned in this piece is that there should be some relief from the remaining stimulus money that will be spent and census hiring in 2010. Even so, the Council of Economic Advisers' annual Economic Report of the President doesn't foresee a big upturn in the jobs market for a few years. Here are the predictions:
- 2010: 95K jobs created per month; unemployment rate=10%; GDP=3%
- 2011: 190K jobs created per month; unemployment rate=9.2%; GDP=4.3%
- 2012: 251K jobs created per month; unemployment rate=8.2%; GDP=4.3%
So when Senate Majority Leader Harry Reid suddenly slashed the jobs bill from $85 billion to $15 billion last week, the near-universal reaction from the economists that I spoke with was that $15B is a drop in the bucket and won't make a significant dent in the labor market.
The $15B bill includes:
- $13B payroll tax break for employers who hire new workers
- $35M for small business depreciation
- $2B billion for "Build America Bonds" for infrastructure;
- 1-year extension of the highway bill, which is unlikely to have any revenue effect