The question is jobs, but there's no one right answer.
When President Obama convenes a jobs summit today, he and all the brainstorming economists and CEOs, small-business owners and labor leaders face a dire predicament with no simple solutions.
The nation's unemployment rate has climbed to 10.2 percent, the highest since 1983. Some 15.7 million Americans are out of work. The average jobless worker has been unemployed for more than six months.
Meanwhile, the immediate benefits of the economic stimulus passed by Congress earlier this year are fading. The recession may be over, but analysts say many of the jobs lost in the downturn probably will not return and high unemployment is likely to persist.
But doing nothing is not an option. The Associated Press spoke with a variety of experts, looking for ways to create and preserve jobs. They offer four strategies they say should be in the mix at the jobs summit — hardly an exhaustive list, but certainly a starting point for discussion.
Work-sharing
When home construction fell sharply, orders coming in to Gary Melillo's department at a factory in Cranston, R.I. suffered. Workers at Taco Inc. continued building heating, ventilation and air conditioning equipment to fill the plant's inventory. But if business didn't pick up, it was clear there wouldn't be enough work to go around.
Taco (pronounced TAKE-o) wanted to avoid layoffs. If it cut workers who average nearly 18 years on the job, it couldn't be certain of getting them back when business picked up. Training new workers costs time and money. Instead, the company tried a strategy called work-sharing to spread the pain and preserve jobs.
Workers in some departments at Taco were cut back to either a three-day or four-day week. Unemployment insurance covered more than half their lost wages and they kept benefits including health insurance.
At least 17 states have some version of work-sharing. Some come with bureaucratic requirements that discourage employers and many programs are little known, said Dean Baker, co-director of the Center for Economic and Policy Research in Washington, D.C. But broader, more aggressive use of such programs could prevent job losses, which goes hand in hand with creating jobs, Baker said.
Tax holidays
Small businesses are a job engine in an expanding economy. But many are just trying to get by now in the face of slumping sales.
To help them avoid laying off workers and encourage them to hire new ones, some business groups are calling for a payroll tax holiday that would give all companies a break from Social Security and Medicare payroll taxes, which total 15 percent.
Half the tax is paid by the employer, the other half by the employee. Suspending the taxes would lower the cost of both existing and new workers while at the same time putting more money in the pockets of employees. That, in turn, could boost consumer spending, which powers about 70 percent of the economy.
A new Job Corps
The New Deal programs of the 1930s were, by far, Washington's best known effort to put people directly to work. But the federal government has paid to create jobs more recently and some experts say, drawing on lessons learned, the time is right to try again.
In the early 1970s, Bill Tracy was a novice local official in Jersey City, N.J. The city was strapped and short on police officers when the Nixon administration offered money for states and cities to hire unemployed workers. Tracy pushed to move officers from desk duty to the streets, then used federal money to fill the clerical jobs with the recently jobless. He hired others as unarmed guards for city parks and housing projects, a net gain of about 200 jobs.
"This is a pretty effective way to get money into the economy and into the pockets of people so they can do something productive," says Carl Van Horn, director of the Heldrich Center for Workforce Development at Rutgers University.
If such a program were put in place, it could quickly have an impact in areas where unemployment is high, Tracy said.
Direct aid to states and cities
With money collected from taxes down and its budget under pressure, the Gary, Ind., school district had to find spending to cut. Nero Lawrence and more than 250 other administrators, teachers and custodians lost their jobs in the fallout.
When Lawrence, 64, was sent home in September, he considered opening his own counseling service. But a couple of weeks later, armed with about $6 million in stimulus money, the district called to offer him a new job. Lawrence returned to work as a "secondary transitional coach." He counsels at-risk students, makes sure they attend school, visits their families at home and does tutoring.
One of the quickest, most direct ways for the federal government to keep people employed, many economists say, is to help state and local governments close their yawning budget gaps. The recession has sent tax revenue plunging, forcing states and cities to cut workers and services.
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