Restore the American Dream for the 99% Act would create millions of jobs

The Restore the American Dream for the 99% Act, a package of job-creation measures and budgetary policy reforms introduced by Congressional Progressive Caucus co-chairs Rep. Keith Ellison and Rep. Raúl Grijalva, would significantly boost employment in the short term and improve the fiscal outlook in the long term. According to The Restore the American Dream for the 99% Act: An Analysis of Job-Creation Provisions, by EPI federal budget policy analysts Andrew Fieldhouse and Rebecca Thiess, if enacted the legislation would create almost 2.3 million jobs in 2012 and nearly 3.1 million jobs in 2013.

“The components of the Act for the 99% target the primary cause of the high unemployment and rising poverty in the U.S.—a massive, persistent slump in demand,” say Fieldhouse and Thiess. “By addressing the root of the country’s economic problems, the act would produce measurable declines in joblessness.”

African American unemployment crisis requires federal intervention

Federal intervention is needed to address high unemployment rates within specific economically devastated communities. In A jobs-centered approach to African American community development, Algernon Austin, director of EPIs Race, Ethnicity and the Economy program, explains that jobs are essential to improving African American communities. The report identifies jobs as the backbone of community development and outlines a plan for the federal government to ameliorate joblessness within black communities. The plan has three components: the creation of public-sector jobs, job training with job-placement programs, and wage subsidies for employers.

Austin notes that since the policies would be applied to any community with persistently high unemployment, it would provide benefits to Latino, American Indian, and some white communities as well.

Unemployment insurance benefits increase job-search activities

November marked the 34th straight month the job-seekers ratio remained above 4-to-1, further demonstrating the need for continued government action. Despite the clear need for legislation that addresses the nation’s ongoing jobs crisis and aids the millions of out-of-work Americans, policymakers have been unable to agree on a plan to renew extended unemployment insurance (UI) benefits.

Instead, the House of Representatives passed legislation authored by Rep. Dave Camp (R-Mich.) that would reduce the maximum number of weeks of unemployment insurance benefits that the federal government provides to jobless workers from 73 weeks to 33 weeks. This week’s Economic Snapshot shows that claims that unemployment insurance benefits dissuade the jobless from looking for work are untrue. Unemployed workers who receive unemployment compensation are more likely to search for jobs online, look at newspaper classified ads, and send email inquiries and applications to prospective employers than those who never receive benefits.

“In addition to the extreme paucity of jobs for job-seekers, the positive benefits [that] current unemployment insurance benefits, which last a maximum of 99 weeks, have on the job search necessitate their continuation,” says EPI economist Heidi Shierholz.

EPI’s research helps frame policy discourse

In the past week, several policymakers have relied on EPI’s research to extol good economic policies that create jobs and help the millions of Americans who cannot find work.

In a commentary for Debate Club, an online feature of U.S. News and World Report, Rep. Lloyd Doggett (D-Texas) wrote, “Depriving jobless Americans of the money they need to put food on the table, shoes on their children, and keep a roof over their head will cut consumer demand for thousands of local businesses and increase the number of home foreclosures. According to the Economic Policy Institute, cutting off unemployment benefits would cost over 500,000 jobs.”
In another piece for Debate Club, Rep. Sander Levin (D-Mich.) cited EPI’s calculations of the number of jobs that would be saved by extending unemployment benefits. “An extension of benefits would not only ensure a continuation of vital assistance to the unemployed, it also will promote our economic recovery,” wrote Levin. “The Economic Policy Institute has estimated that preventing unemployment benefits from expiring could prevent the loss of more than 500,000 jobs.”
Finally, Minnesota Public Radio covered Rep. Keith Ellison’s exhortation to quickly pass the Restore the American Dream for the 99% Act; Ellison quoted EPI’s estimation that the plan will create 5 million jobs within two years.

EPI in the News

EPI’s research and analyses continue to be a chief resource for the nation’s leading economic writers, appearing in the New Republic, Atlanta Journal Constitution, MSNBC, Reuters,Bloomberg Businessweek, St. Petersburg Times, Chicago Sun-Times, Huffington Post, and the Washington Post. Here are some of the highlights:

The New Republic’s Laura Stampler spoke with labor economist Heidi Shierholz to explore the recession’s impact on women. The article quoted Shierholz’s observation that, “On more than one occasion, there was a sense that people wanted me, particularly as a woman economist, to say that [the recession] would have a silver lining for women. But I just kept on getting back to the fact that women are getting slammed [too].”
EPI President Lawrence Mishel discussed the stimulative effects of extending unemployment benefits with Reuters’ Lucia Mutikani

“If the unemployed do not have money to spend, then spending in the economy is going to decline. Providing unemployment benefits is one of the effective ways to create jobs,” he said.