What About the Jobs Deficit?
Members of Congress who are opposing the pending jobs legislation on the grounds that it isn’t fully paid for and will increase the current deficit are focusing on the wrong deficit. Yes, we have a long-term budget deficit that we need to take very seriously. But the current deficit to worry about right now is the jobs deficit.
Despite encouraging signs of revival in the job market, we are still down almost 8 million jobs from where we were at the start of the recession in December 2007. And, of course, population growth since then has expanded the potential labor force and hence the number of jobs we need to create to restore full employment.
There are roughly six unemployed workers for every job opening, 46 percent of the unemployed have been looking for work for at least six months, and the average unemployed worker has been looking for work for 33 weeks — by far the highest average on record and well above the 20 or so weeks in the deep 1981-82 recession.
If Congress leaves town without extending the temporary unemployment insurance benefits set to expire next week, the unemployment insurance map will change from this:
(For an explanation of the different types of unemployment insurance expansions cited in the maps, see here.)
Letting these benefits expire wouldn’t just impose unnecessary hardship and uncertainty on the unemployed. It would also slow the recovery by depriving the economy of a needed boost that would encourage stronger job creation. As my colleague Paul Van de Water and I have argued, this is too high a price to pay to avoid the very small long-term deficit impact from passing the full jobs bill.