Closing the deficit by creating the jobs of tomorrow
Following a presidential initiative on jobs and deficit reduction, it is important to look at what will bring jobs and economic strength in the near and long term.
Wednesday, September 21, 2011 - 00:07
REBUILDING: Funding needed infrastructure repairs can put people back to work and make gains towards sustainability. (Photo: Highways Agency/Flickr)
Following a gruesome fight over the debt ceiling, the president has tried to turn the agenda back to jobs. President Obama laid out a $447 billion jobs package with many targeted tax cuts and infrastructure spending designed to create jobs fast. The larger question is how jobs will be created in the medium- and long-term in Virginia and America.
Jobs we've lost: Manufacturing
Two important sectors are essential in understanding where the jobs have gone and they are both predominantly low or unskilled in nature. Manufacturing has long been a staple for the American ideal but many companies have been outsourcing factories for environments with less regulation and lower wages. Some sensible action can be taken to narrow the scale of this inequity, but it would be unlikely that much could be done to retrieve these jobs. As President Obama put it in his recent speech: "We shouldn't be in a race to the bottom, where we try to offer the cheapest labor and the worst pollution standards. America should be in a race to the top. And I believe we can win that race."
It is also unhealthy for an economy to go without a manufacturing base, in part because much of the innovation in industry results from the factories. So if we want manufacturing jobs but don't want to throw environmental and labor standards by the wayside, then we must fight for the emerging manufacturing jobs where the relevant labor is in shorter supply. This means that we must focus on education to raise the quality of the work force and keep up in terms of product innovation; unfortunately education tends to be one of the first items cut from state budgets. We can also reasonably forecast the prices of fossil fuels to rise as renewables fall. To get a head start on what will become large international industries, action could be taken to lower the costs of these products to producers and/or consumers.
Virginia's education facilities could benefit greatly from the president's jobs bill. The state would receive $425.3 million to restore school infrastructure and lead to more than 5,000 jobs. $742.3 million would also be given in aid to prevent teacher and first responder layoffs and hire more in the commonwealth. Another $110.1 million would go to community colleges in Virginia, according to the White House projections.
Jobs we've lost: Construction
The second sector is that of construction jobs. This is largely a consequence of the housing bubble leaving a void in available jobs to build new properties. A surplus of homes, combined with the deleveraging in the private economy — which is holding back demand outlooks and business investments — leaves an obvious option on the table. With interest rates at historic lows, the government should take advantage of cheap money and lowered construction wages to renovate the nation's infrastructure to meet the sustainability and ecological needs of the coming century.
About $809 million of the American Jobs Act's initial $50 billion in infrastructure spending would go to Virginia, which could yield more than 10,500 jobs, according to the White House. Another $20 million could be given to Virginia to renovate foreclosed and vacant homes and businesses.
To close the jobs deficit, the ecology deficit and the budget deficit, you must invest — not to recover the jobs of the past, but to create the jobs of tomorrow.
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