Statement on the President's Jobs Summit

Center for Economic and Policy Research Co-Director Dean Baker issued the following statement on President Obama's upcoming jobs summit:

"It is encouraging to see the Obama administration return its focus to
job creation. The stimulus bill passed last February was an important
factor in stopping the steepest economic downturn since the Great
Depression. The latest report from the Congressional Budget Office
indicates that the ARRA of 2009 may have been responsible for creating
as many as 1.6 million jobs, lowering the unemployment rate by as much
as a full percentage point."

"Nonetheless, the downturn has been markedly worse than was predicted
last winter. The unemployment rate is at an unacceptably high level and
is now projected to remain high long into the future, remaining in
double digits for most of 2010, and not falling below 7.0 percent until
late 2012. President Obama has rightly decided that this baseline is
unacceptable."

"There are four steps that can be taken to reduce the unemployment rate quickly:

1. Flexible employment credits
to allow employers to shorten work hours instead of laying off workers:
Each month, employers are laying off close to 2 million workers. If the
government gave employers tax credits to shorten work time while
leaving pay unchanged, it could reduce these layoffs. If the number of
layoffs fell by just 10 percent, this would have the same effect on
employment as adding 200,000 jobs a month or 2.5 million a year.
Germany has used this mechanism to keep its unemployment rate from
rising, even though it has experienced a steeper recession than the
United States.

2.
Support for education, health care and other vital state and local
government services: Under budget pressure, state and local governments
across the country are cutting these services and laying off workers.
Aid from the federal government can allow these workers to keep their
jobs and services to continue to be provided.

3. Direct job creation: There are parts of the country where
the unemployment rate now exceeds 25 percent, with youth unemployment
well above 40 percent. To prevent a generation of young people from
being locked out of the job market, it is important to have public
service jobs that can employ people immediately.

4. Right to rent
for homeowners facing foreclosure: If homeowners facing foreclosure had
the right to remain in their homes as tenants paying the market rent
for a substantial period (5-10 years), it would provide substantial
housing security to millions of families while stemming the nation's
rising number of foreclosures. This policy could also provide an
economic boost since it would free up money for millions of homeowners
who are now struggling with mortgage debts that they cannot pay. This
would in turn lead to a boost in consumption that would increase demand
in the economy."

"These steps
would go far in reducing layoffs, fostering job growth and giving
relief to the millions of Americans suffering as a result of the
economic crisis."