What Would Roosevelt Do?

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Sun Aug-01-10 05:06 PM
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What Would Roosevelt Do?

By ROBERT J. SHILLER
Published: July 31, 2010

ACROSS the United States, thousands of federally financed stimulus projects are under way, aimed at bolstering the economy and putting people to work. The results so far have not been spectacular.

Why not? There’s nothing wrong with the idea of fiscal stimulus itself. We need more stimulus, not less — but we need to focus much more on actually putting people to work.

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Consider one of the most applauded of Roosevelt’s programs, the Civilian Conservation Corps, from 1933 to 1942. The program was open to young men, initially those 18 to 25, a group that was quite vulnerable economically. The C.C.C. emphasized labor-intensive projects like planting trees.

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Congress has recently set plans for tripling the size of AmeriCorps, the modern counterpart of the C.C.C., which now takes both sexes and has no age cap. At its peak, the C.C.C. employed 500,000 young men. Under current plans, AmeriCorps would top out at 250,000 people in 2017, even though the nation now is two and a half times larger. We ought to be bolder.

Big new programs to create jobs need not be expensive. Suppose the cost of hiring a single employee were as high as $30,000 a year, several times typical AmeriCorps living allowances. Hiring a million people would cost $30 billion a year. That’s only 4 percent of the entire federal stimulus program, and 0.2 percent of the national debt.

Why don’t we just do it?

The programs are already in place, but they are being ignored.

Job Subsidies Providing Help to Private Side

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About 247,000 workers will have been placed in these subsidized jobs by the end of September, according to the Center on Budget and Policy Priorities, a research organization. The jobs cover everything from assembly-line work to white-collar positions like business development, and typically pay $8 to $15 an hour, according to LaDonna Pavetti, a director at the center. There are exceptions: San Francisco, for example, pays up to $74,000 in annual salary, which employers can also supplement with additional pay.

So far just over a billion dollars has been approved to create subsidized employment programs in 36 states and the District of Columbia, according to the Department of Health and Human Services. The biggest year-round program is run by Illinois, which has put 22,000 workers in subsidized jobs (and 5,000 in subsidized summer youth jobs) and has 30,000 people on its waiting list.

Most states pay 100 percent of workers’ wages up to a certain point. To qualify for the subsidy, workers must have a low household income. They must also have minor children, or be under age 21 themselves. Employers seem to hear about the programs largely through word of mouth, and some states actively help match eligible workers with companies.

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Also, ripe for funding is YouthBuild Investing in youth to rebuild our future