A Vision for Economic Renewal: An American Jobs Agenda

8/4/2019 A Vision for Economic Renewal: An American Jobs Agenda

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A Vision or Economic Renewal:An American Jobs Agenda

THE

TASK FORCEON JOB CREATION

JU LY 2011


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LETTER FROMTHE CHAIRMEN

This report shows a lot o big numbers with a lot o bad news. It is about

globalization out o control, people without work, jobs lost to competitorsoverseas, a drop in manuacturing, unemployed youth with

no options, America losing its technological edge.

It is a sad stew o overwhelming acts that can be hard to conront.

But conront them we must.

Behind every indierent statistic is a husband, wie, daughter, mother,sister, riend, neighbor or ellow American in trouble. There are many

o them, and each has a tale o deprivation or loss that needs to be heard.

President Franklin D. Roosevelt understood this when he told Congressand the nation in his nal State o the Union Address, We cannot be

content, no matter how high the general standard o living may be, isome raction o our peoplewhether it be one-third or one-th or one-

tenthis ill-ed, ill-clothed, ill-housed, and insecure. He recognized thatthe economic challenges the nation aced during the Great Depressionwere playing out in the lives o ordinary Americans all across the country.

President Roosevelt understood that his duty and that o government

was to replace the insecurity and ear and hopelessness that hadrightly gripped the population with palpable reasons or hope. He knew

that Americans needed protections and employment and security.

Our national leaders today need to think about the good people in our

country who ace the same ears and who need the same assurances.

We need our Executive branch and Congressional leaders in Washington

today, just as we needed them then, to help steer this nation to asaer harbor.

Please accept this report, and our recommendations or immediate action.

Sincerely,

Leo Gerard and Leo Hindery, Jr


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TABLE OF CONTENTS

08: Executive Summary

16: 1Manuacturing

24: 2Trade and Globalization

34: 3U.S.China Trade

40: 4Inrastructure Crisis

46: 5Jobs in the Green Economy

52: 6Youth Unemployment

58: Closing Summary

TASK FORCE MEMBERS

EDITED BY LINDA FLANAGAN

R. THOMAS BUFFENBARGERInternational Association

of Machinists and

Aerospace Workers

ANNA BURGER

Harvard University AdvancedLeadership Initiative Fellow

CHRIS CHAFEClean EconomyDevelopment Center

LEECIA EVENo Limits Foundation

MARC FASTEAUAmerican Strategic

Insurance Group

RALPH GOMORYStern School, NYU

OWEN HERRNSTADTInternational Association

of Machinists and

Aerospace Workers

KENT HUGHESWoodrow Wilson Center

ROB JOHNSONRoosevelt Institute

LEO HINDERY, CO-CHAIRUS Economy/Smart

Globalization Initiative,

New America Foundation

LEO GERARD, CO-CHAIRUnited Steelworkers

GIL KAPLANKing and Spalding

MICHAEL LINDNew America Foundation

MIKE LUXProgressive Strategies

DANA M. MARSHALL

LAWRENCE MISHELEconomic Policy Institute

PAT MULLOYUS-China Economic andSecurity Commission

ALAN PLATTGibson, Dunn & Crutcher, LLP

CLYDE PRESTOWITZEconomic Strategy Institute

ANDREW RICHRoosevelt Institute

BERNARD SCHWARTZBLS Investments

SHERLE SCHWENNINGERNew America Foundation

A Vision or Economic Renewal:

An American Jobs Agenda

THE

TASK FORCEON JOB CREATION

JULY 2011

0706


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08

EXECUTIVESUMMARY

Our infrastructure is

collapsing even as thepeople most equipped torepair i t need work.

09

The economic environment in Americatoday is more dire than most o us haveever known. We are in the midst o an unemploymentemergency, in essence a jobless recovery: notwithstanding

recent marginal upticks in ocial U.S. jobs numbers, therewill be no undamental improvement in the unemployment

picture unless major new national economic strategy initiatives

are taken. Who will step up to drive them orward?

Americans need work, but many o the jobs on which they used

to depend have vanished or gone abroad. Ocial unemployment

numbers hover around nine percent. Compounding the challenge

is the large budget decit, the $14 trillion in ederal debt, and the

large and growing size o our nations international debtor status,

which is the result o our massive and persistent trade decits.

So ar the White House has ailed to acknowledge the

magnitude o the problem and continues to apply a scattershot

approach to solving it. Rather than bring all national resources

to bear on the jobs crisis, t he White House has addressed

the interlocking variables in separate stovepipes.

Our national leadership is responsible or tackling such crises, and

President Obama has shown a willingness to reorm health care and

regulate the nancial services industries. Today our nation needs

that same passion and commitment directed at job creation. All the

actors contributing to the jobs crisis must be examined together

so that our government can apply a coherent set o solutions to

the problem. America needs the ull attention o Congress and

the White House to help get our unemployed back to work.

This report starts with our recommendations or reversing the crisis.They ocus and reorganize the Administrations job creation eorts

through legislative action and the creation o new units in the Executive

branch. Carrying them out will demonstrate responsiveness on the

part o our government and a return o hope to millions o Americans

who long or a steady paycheck and basic nancial security.

The report continues by shining a light on six related economic

EXECUTIVE SUMMARY


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10

THE TASK FORCE ON JOB CREATION

policy areas that should be addressed to reverse the jobs crisis:

manuacturing, trade and globalization, U.S.-China trade, the

inrastructure crisis, jobs in the green economy, and youth

unemployment. As well, the report proposes concrete recommendations

that can be taken immediately to remove obstacles to hiring, and

oers other policy options that should be adopted over time.

Manuacturing, rst, is in reeall: in just three years, 2.5 million

more jobs have been lost. The backbone o any economy, providing

good jobs and respectable wages to skilled and unskilled

laborers alike, manuacturing is the main source o exports and

the genesis o innovation. Our nations manuacturing is only

one-third the size it needs to be, and its continued decline will

limit job growth and jeopardize our national standing.

Trade and globalization in their present orm exacerbate the

manuacturing industrys woes. Many o our trade partners, especially

China, have ailed to protect the rights o workers or the environment,

and have greatly subsidized their industries at our expense. Large

American and other international corporations have seen the

benet o moving manuacturing to cheaper places abroad, and inturn workers here have lost their jobs. Yet our ederal government

continues to address trade in piecemeal ashion, overlooking the

challenges it poses to our national competitiveness. We need an

integrated government approach to manuacturing and global trade.

Coincident with the loss o manuacturing is the decline o our

nations inrastructure. Bridges, roads, electrical grids, even

11

EXECUTIVE SUMMARY

broadband penetration, among other large-scale transportation

and energy systems, are missing or in disrepair. Our inrastructure

is collapsing even as the people most equipped to repair it

need work. So ar, our leadership has largely ailed to marry

the demand or work with those who can supply it.

Employment opportunities in the green economy should provide

some relie. As with inrastructure repair, the types o skills needed

to improve energy eciency, or example, can be ound among our

unemployed. As the demand or clean and ecient manuacturing

20%

18%

16%

14%

12%

10%

8%

6%

4%

2%

0%

201120102008 2009

Official Unemployment percentage Actual Unemployment percentage

Real Unemployment vs Ofcial Unemployment

Not since the Great Depression hasofficial unemployment been abovenine percent for morethan 20 months.

grows, the employment opportunities or our workers should grow

with it. But green jobs are too limited to rescue the vast numbers

o unemployed. Nevertheless, our government can modiy several

existing laws to promote hiring in this economic sector.

Source: Bureau of Labor Statistics


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12 13

EXECUTIVE SUMMARY

The hardest hit among the unemployed are young people. When

the college educated and those without a high school diploma

scramble or the ew available jobs, the result is underemployment

or the educated and joblessness or societys least-equipped.

Youth unemployment is especially pernicious because its eects

can last a lietime, in the orm o permanently depressed wages ordependence on public welare. Our government needs to be more

creative and supportive in helping employers hire young people.

The near-term recommendations we propose will cost relatively

little to implement. And given the two-year renewal o the Bush tax

cuts or the wealthiest o Americans, taking steps now to increase

employment opportunities or the less ortunate is appropriate

and right. Some o our large-scale recommendations will have

to wait until our national scal health improves, as benecial asthey will be over the long term. In the meantime, we recommend

the immediate adoption o several programs and l aws.

Citizens everywhere look to their governments or leadership. They want

those who control the levers o power to listen and respond in times

o trouble. Demonstrators in Egypt and across the Middle East have

revealed this same human desire or accountability and action rom those

with the power t o make change. Yet even in our own democratic society,

the cries o the desperate and earul can go unheard. Elected ocials

and those with the responsibility to serve and protect the American

people are distracted by the background buzz o competing problems

and other urgent needs. They oten tune out the unpleasantness

o everyday lie or tens o millions o unemployed Americans.

Nothing is more important than getting people back to work. Now

is the time to pay attention, to nally see what is happening, and

to take action. Show the moral courage that denes true leadership

and resolve to restore what all good Americans want and need: the

security, well-being and sel-respect that come rom work.

When income grows, who gains?

19481979

Average incomes in theU.S. grew by $20,822

The richest 10% got33% of that growth.

The bottom 90% shared

67% of income growth.

Average incomes in theU.S. grew by $1,460

All growth went tothe richest 10%.

Income of the bottom

90% actually declined.

20002007

Bottom 90% Top 510% Top 15% Top 1%

Source: The data come from this table http://www.econ.berkeley.edu/~saez/TabFig2008.xlson Emmanuel Saezs website at University of California, Berkeley.



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9.) Create a new bureau within the Justice Department to enforce

trade laws and agreements. An independent oce within the

Justice Department would be more eective than the United States

Trade Representative (U.S.T.R.) in enorcing trade agreements.10.) Initiate trade cases under the U.S. trade remedy laws, not

just the W.T.O.The Unites States should spearhead an Unfair Trade

Strike Force to be deployed when nations violate trade laws.

11.) Pursue a variety o initiatives aimed at countering Chinas

thet o intellectual property, restrictions on the export

o rare-earth minerals, abuse o its centralized approval

authority, and indigenous innovation policies. Our government

must be willing to challenge and mitigate the disastrous eects o

Chinese economic policies on American manuacturing and trade.

12.) Extend the Cash Grant Program or renewable

energy production. Allowing an extension to the existing

1603 program, which aids renewable energy companies,

would help create jobs and avoid urther losses.

13.) Lengthen the Advanced Manuacturing Tax Credit

(Section 48c). Investments in qualied advanced energy

products should continue to receive a tax advantage.

14.) Expand Title 17 Loan Guarantee Program. Broadening

Title 17 to include energy eciency investments could create

new green jobs in commercial and industrial building.

15.) Extend the Work Opportunity Tax Credit (W.O.T.C.) beyond

August 2011. The nations ongoing youth unemployment crisis

demands that the W.O.T.C. provision, which gives employers a tax

incentive for certain hires, should be extended beyond this summer.

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EXECUTIVE SUMMARY

14

1.) Create a National Inrastructure Bank. An independent

nancial institution owned by the government would und a

broad range o initiatives and leverage private capital.

2.) Link an investment tax credit directly to jobs. A ten percentinvestment tax credit or the rehabilitation and renovation

o existing manuacturing acilities could pump billions o

dollars into the modernization o Americas plants.

3.) Enact temporary taris. As permitted under World Trade

Organization (W.T.O.) rules, t emporary taris should be

enacted to overcome our nations huge and persistent trade

decit, as well as the loss o manuacturing jobs.

4.) Establish frmer buy-domestic procurement requirements.

No single measure would do more to help resuscitate U.S.

employment, particularly in manuacturing, than a buy-

domestic government procurement requirement that is

consistent with our international trade obligations.

5.) Eliminate the tax incentives that encourage American companies

to invest overseas rather than here at home. Government

resources should be used to provide nancial and legal inducements

or corporations to provide good jobs or Americans at home.

6.) Create an independent body within the White House

ocused on American competitiveness. A stand-alone unit

with this primary mission would serve to rationalize and guide

our nations trade and manuacturing policies, and help ocus

the U.S. government on the challenges that China presents.

7.) Protect national security manuacturing. The advanced

technology and manuacturing capacity necessary or Americas

weaponry and sel-deense must be saeguarded.

8.) Require Employment Impact Statements to determine which

government programs create and support U.S. jobs. Government

contracts and other awards should avor those applicants whose

projects can be shown to provide greater domestic employment.

RECOMMENDATIONS

EXECUTIVE SUMMARYTHE TASK FORCE ON JOB CREATION


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Industries that oncewere great contributorsto our countryauto,shipbuilding, machinetools and evenelectronicsare shadowsof what they once were.

MANUFACTURING

17

MANUFACTURING 1

Manuacturing is essential or our nationseconomic recovery and long-term health.Employing less than a tenth o Americans, and making up about

11 percent o our Gross Domestic Product, manuacturing provides

good jobs that require high skills and pay above-average wages.Investment in manuacturing research and development has created

new industries and sparked innovations that have employed generations

o U.S. workers and bolstered our nations economic health.

Though critically important, the sector is ailing: as a percentage o

G.D.P., manuacturing has dropped 15 percent since 1998. More than

2.5 million manuacturing jobs have been lost just since December 2007.

Between January 2000 and January 2010, manuacturing employment

declined by nearly six million. Industries that once were great

contributors to our countryauto, shipbuilding, machine tools and even

electronicsare shadows o what they once were. Jobs in other leading-

edge industries like aerospace are being sent oshore. Even newindustries that started in the United States, such as renewable energy,

are mostly creating jobs outside our borders in countries like China.

Lost manuacturing jobs are especially painul because their

substitutes in the service industry are not their equals.

Manuacturing jobs pay a substantially higher income, can

help ameliorate our trade imbalances, and generate the largest

multiplier o any job sector in the economy. I t he manuacturing

sector produced 20 percent o GDP, 12 million workers would be

hired as a direct result, and another 30 million jobs would open up

to support them. No nation as big and complex as ours can have

MANUFACTURING 1

Manufacturing jobs pay asubstantially higher income,ameliorate the balance of trade, andgenerate the largest multiplier effectof any job sector in the country.


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Establish frmer buy-domestic procurement requirements.

No single measure would do more to help resuscitate U.S. employment,

particularly in manuacturing, than a buy-domestic governmentprocurement requirement. All inrastructure projects unded and

guaranteed by the ederal government and the proposed inrastructure

bank should require purchases to be made in America rather than

overseas, consistent with our international trade agreements. As

well, to qualiy as Made in America, at least 75 percent o the

content should have to be manuactured within our borders. To make

that happen, Congress should build on the Make it in America

initiative and require domestic content calculations to be eective

and transparent. Domestic sourcing requirements or all government

procurement programs (e.g., Buy American, the Recovery Act) and

programs that support U.S. exports (e.g., the U.S. Export-Impact Bank)

should also be reviewed to ensure that contracting agencies are obeyingand implementing the requirements. The Deense Authorization Bill

passed in December that requires the Pentagon to buy solar panels

rom U.S. manuacturers is just the right step. In addition, Congress

needs to enact a successor to the 1933 Buy American Act.

Link an investment tax credit directly to jobs.

During the recession o the 1980s, then Senator Howard Metzenbaum

(D-Ohio) proposed a ten percent investment tax credit to rehabilitate

existing stores and businesses. Crated to encourage businesses

to renovate older downtown buildings, the legislation used $40

billion in tax expenditures to generate nearly $400 billion in privateinvestment. A 10 percent investment tax credit or the rehabilitation

and renovation o existing manuacturing acilities could pump

billions o dollars into modernizing Americas plants. With an

additional investment tax credit or new equipment, businesses could

retool their actories. Banking these two investment tax credits to

oset downstream prots would create millions o new jobs.

IMMEDIATE ACTIONSIMMEDIATE ACTIONS

2 1

Require Employment Impact Statements to determinewhich government programs create and support U.S. jobs.

Congress should introduce legislation that links domesticemployment with certain government activities. One way to carry

out this simple, common-sense policy would require those bidding

or applying or government contracts, assistance, grants, or awards

to provide detailed Employment Impact Statements (E.I.S.) in the

application process. Results o the E.I.S. would actor into the

outcome o the project or transaction. Reporting requirements

and monitoring would insure compliance with E.I.S.

MANUFACTURING 1THE TASK FORCE ON JOB CREATION


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Formulate a W.P.A.-like program to create jobs now.

As the U.S. economy strengthens and the decit shrinks, the government

should consider a 21st Century version o Franklin Roosevelts Works

Progress Administration. Roosevelt put millions o Americans back

to work in 1935 by creating jobs that improved living conditions

and generated new wealth. Todays unemployed can be put to work

renovating actories and installing new equipment, devising new

nancing, marketing and sales packages or local business, and

reinventing the way we deliver skills. Providing counties and local

communities with the ederal dollars to hire the unemployed will improve

our global competitiveness and jump-start depressed local economies.

Create a Presidents Council on Manuacturing Policy.

The U.S. has no national manuacturing policy and no mechanism or

developing one. The President should create a permanent Council

on Manuacturing to help the ederal government develop smart

manuacturing policies. Consisting o senior government ocials,

private sector leaders, and labor representatives, the Council would

aim to restore domestic manuacturing and to build high-quality

domestic manuacturing jobs. As well, it could assist the Administration

and Congress in ensuring that policies throughout the government

contribute to domestic manuacturing. The Council also could advise the

Administration on those manuacturing industries that are essential to

national security and recommend ways to spur start-up companies.

LONG-TERM RECOMMENDATIONSLONG-TERM RECOMMENDATIONS

23

Increase unding or the Technology Innovation Programand the Manuacturing Extension Program o theNational Institute or Standards and Technology.

These programs promote ederal R&D in new technologies. The

Manuacturing Extension Program diuses existing technology

and best business practices as well as new technologies

that emerge rom the Technology Innovation Program.

MANUFACTURING 1THE TASK FORCE ON JOB CREATION


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2

TRADE ANDGLOBALIZATION

We must mobilize todefend ourselves andrestore balance andmutual benefit tointernational trade.

25

As the high paying jobs that oncebelonged to American workers moveoverseas, we find our trade deficitincreasing.

TRADE AND GLOBALIZATION 2

The United States now nds itsel in anew era o global economic competitionin which not all nations win. Since 2001, ournation has lost millions o manuacturing jobs and at least a million

white collar jobs, while experiencing massive annual trade decits

totaling over $6 trillion. Though other nations have developed

strategies to compete in a globalized economy, America has not.

As a result, we are losing our wealth to other nations as well as

the technological capabilities we need to innovate and create new

wealth. Globalizationthe process o creating a unied global

economy through the breaking down o barriers among national

economieshas helped generate this downturn or America in

manuacturing, trade, and income. We must mobilize to deend ourselves

and restore balance and mutual benet to international trade.

Our government did not agree to the trade policies and international

agreements adopted years ago with the intention o damaging

our industry or economic standing. Indeed, the Uruguay Round

Trade Agreement o 1993, which cut taris and removed obstacles

to trade, sought to expand the global fow o goods, services and

investments. All nations and economies were meant to benet.

But in the absence o obligations to protect worker rights or the

environment, or to ensure that the social saety nets o the developed

countries could survive in a global trading system, basic human

rights have suered and our own economy has been damaged.

In many parts o the developing world, workers toil or minimal

pay under harsh conditions because organizing against unair


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We must fix our tax code so thatcorporations are not rewarded forclosing plants and shipping jobsto countries like China.

26

treatment is prohibited. This cheap labor seduces large multinational

companies to move production overseas, where health care,

pension and environmental costs are minimal. Private corporations

prot, particularly those at the very top, while human rights and

the environment are plundered. At the same time, U.S. workers

lose their jobs and American manuacturing grows weaker.

This process is then compounded by the act that many o the Asian

countries to which these jobs are being relocated are manipulating their

currencies to keep them undervalued against the dollar or providing

subsidies or other unair trade benets. This accelerates the movement

o jobs abroad. As the high paying jobs that once belonged to American

workers move overseas, we nd our trade decit increasing. Since

China joined the W.T.O. in December 2001, we have r un over two trillion

dollars in trade decits with that nation alone. Last year, $80 billion o

our $270 billion decit consisted o advanced technology products.

Jobs that replace manuacturing jobs lost to other nations paysubstantially less. Trends in U.S. income distributions conrm this. While

earned income levels or 90 percent o the population have not budged

or ten yearsand that o the bottom 60 percent o wage earners has

been stuck or 20the upper tier has seen enormous income growth.

Economists at the Paris School o Economics report that between

2002 and 2007 the top one percent o Americans enjoyed all o the

nations income growth. The numbers are just as stark when comparing

percentages o total income: in 2007, the top ten percent o earners made

50 percent o our nations total income, while the one percent on top took

home 24 percent o it. Put dierently, the top tenth o that one percent

takes home the combined earnings o the 120 million on the bottom. In

part because o outsourcing, corporate executives and large shareholders

27

have watched their earnings soar, while American workers have seen

their incomes all or jobs disappear. More than a handul o economists

have begun to wonder i America is going the way o a banana republic.

Globalization has accelerated so quickly in the last 15 years that our

leadership has ailed to recognize its sometimes devastating eects

on our economy and way o lie. We must develop a national strategy

to compete in the 21st century. The standard o living o our citizens

and our nations security will depend on our ability to do so.


US Trade Balance 2010 (Top 10 Trading Partners)

COUNTRY

Canada

China

Mexico

Japan

Germany

United Kingdom

South Korea

France

Taiwan

Brazil

Total Trade (in billions)Imports + Exports

524.67

456.82

392.98

180.89

130.88

98.25

87.7

65.56

61.93

59.28

Total Trade (in millions)Exports Imports

-27,666

-273,065

-66,333

-59,802

-34,478

-1,258

-10,015

-11,540

-9,879

11,439

Source: US Census



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28

Eliminate the tax incentives that encourage Americancompanies to invest overseas rather than here at home.

We must x our tax code so that corporations are not rewarded orclosing plants and shipping jobs to countries like China. Right now,

we actually provide tax incentives or companies to invest overseas, a

sure sign that our economy works best or big business instead o or

regular Americans. Instead, we should be using government resources

to provide nancial and legal inducements to those corporations,

domestic and oreign, that will provide good jobs to America.

Protect national security manuacturing.

Today the United States has an $80 billion annual trade decit with

China or what are called Advanced Technology Products, many o

which are essential to our nations high-tech weaponry and national

deense. Advanced Technology Products include semiconductors,

biotech medicines, ber optics, satellite technology and other

critical products. In addition to losing high-value manuacturing

jobs overseas, America relies so much on oreign countries or

these and other vital products that our national security may be

jeopardized. Congress should pass legislation requiring certain

critical items to be subject to a national security impact statement

beore allowing their manuacturing overseas. Any product that t he

Department o Deense includes on its Militarily Critical Technologies

List (M.C.T.L.), or which has potential national or homeland security

implications, should be subject to much stricter review beore thetechnology and jobs are sent overseas. As well, Congress needs to

more careully scrutinize technology transers o civilian goods,

such as avionic equipment, that can be put to military use.

IMMEDIATE ACTIONS

29

Enact temporary taris.

Restricting imports is permissible under W.T.O. rules to address large

trade decits and resulting reserve imbalances, and advisable when

particular industries are under threat. Indeed, according to Article XII o

the G.A.T.T. agreement, a nation may restrict the quantity or value o

imports in order to saeguard its external nancial position and its balance

o payments. Given our nations huge and persistent trade decit, as

well as the loss o manuacturing jobs, Congress should enact temporary

taris to protect our high-value manuacturing. A temporary policy o

import tarissuch as the ones that the Nixon Administration imposed in

1971, using the same logiccoupled with encouragement o oreign direct

investment in these industries, would provide the United States with

all the benets o ree trade without promoting a low-wage workorce.

Create a new bureau within the Justice Departmentto enorce trade laws and agreements.

Those who make the trade agreements should not be responsible

or enorcing them. An independent oce within the Department o

Justice, divorced rom the U.S.T.R. where deals are made, would be

tougher and more eective at enorcing our trade agreements.

Initiate trade cases under the U.S. traderemedy laws, not just the W.T.O.

The United States should spearhead an Unair Trade Strike Force to be

deployed when nations violate trade laws. The Strike Force should review

trade fows and agreements, as well as the eect trade is having on U.S.industry. Where there are instances o unair trade hurting U.S. producers

and workers, the Strike Force should automatically initiate anti-dumping,

countervailing duty, and other measures to halt unair trade.

TRADE AND GLOBALIZATION 2THE TASK FORCE ON JOB CREATION


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Oset tax disadvantages to American corporationscaused by the Value Added Tax (V.A.T.).

The United States relies exclusively on an income tax to raise revenuerom its corporations. Most o our trading partners, including all the

largest, use a lower corporate income tax than the United States,

as well as a V.A.T. Because the V.A.T. is reunded on exports and

charged on imports while income tax is not, the result is net higher

taxes on U.S.-made products sold both here and abroad. This has the

unintended eect o encouraging American manuacturers to move

production out o the United States. Congress should enact specic

countermeasures to rectiy the imbalance, including oering partial tax

rebates on exported goods and imposing equivalent taxes on imports.

Create a U.S. Technology Strategy Board to administerand maintain National Technology-Based Planning and todevelop a competitiveness strategy or the United States.

Japan, Germany and China use technology mapping systems to

develop broad national strategies or business, education, research

and development, and trade. The key proposition o technology-

based planning, developed in the United States as Project Socrates

under the Reagan Administration, is that competitive advantage, at

the company or national level, comes rom control o technologies

that are critical to satisying present and uture consumer needs.

Technology-based strategic planning starts with a map o all important

technologies, showing how they relate to each other and to present

and anticipated consumer needs. All entitiesbusiness, academic

and government, domestic and oreign, where these technological

capabilities resideare part o this techspace map, as is the strength

o each entitys position in each relevant technology. Strategy is

then developed to ensure that critical, interactive technologies are

available or can be developed, and to deny them to competitors. The

LONG-TERM RECOMMENDATIONS

31

Promote a Manuacturing Education Act toprovide vocational and technical training.

Adults at the secondary and post-secondary school level

require urther training or the kinds o manuacturing jobs

that will be available in the uture. This training should be a

high priority at the national, state, and community levels.

U.S. should establish a National Technology-Based Planning Process,

insulated rom partisan politics, which would provide voluntary but

integrated and coherent strategic guidance to a wide cross-section

o public and private entities. Legislation recently reintroduced by

Congressman Frank Wol (R-VA) is aimed at establishing such a system.

Adopt a set o principles to guide trade agreements.

Trade deals must have at their core strong protections or the global

environment and basic labor standards, such as prohibiting sweatshops

and child labor and protecting the right o workers to join unions.

They must strive to level the playing eld among trading partners.

As well, American interests should come rst in all agreements. We

must stop assuming that other countries will voluntarily abandon

the hundreds o non-tari trade barriers they have erected to urther

their long-term national economic strategies. Most simply do not

believe in unrestricted ree trade; their broad public statements in

support o it are smoke screens to induce the United States not to

adopt its own more selective and aggressive trade policies in support

o our own key industries. Trade negotiators should be required to

adhere to the ollowing basic principles o ree and air trade.

1.) Trade deals must provide clear and measurable benefts

or Americans. For U.S. manuacturing to prosper, domestic

manuacturers must be able to compete on a level playing eld

with producers in other countries. Accordingly, deals must include

prohibitions against illegal subsidies, currency manipulation and

TRADE AND GLOBALIZATION 2THE TASK FORCE ON JOB CREATION


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32


33


other cheating o the sort that is in act encouraged under most

current trade arrangements. Foreign trade barriers, like those

in China, must be challenged and removed. Demands by othercountries or the transer o sophisticated U.S. technology and

production in return or market access must be curtailed.

2.) American leaders must set a national goal to balance

trade in goods and services within fve years. The Obama

administration aims to address our national trade problem by

doubling exports in ve years. But even this kind o export

growth will not resolve trade imbalances when imports

continue to grow aster than exports. Our leadership must be

resolved to use every tool at its disposal to balance trade.

3.) Trade policies must lit up workers around the world bytying both unilateral trade preerences and bilateral and

multilateral trade agreements to measurable progress on

labor rights. Making sure that workers around the globe are

treated airly and share in the gains o trade is right morally and

economically, and will make America saer and more secure at

home. All o our trade partners should have to meet basic labor

standards, and we must halt trade with those countries where being

a trade-unionist means putting your lie at stake. Gains rom trade

should fow to workers and not to those who exploit them. Never

again can our nation condone trade agreements with countries

that ignore good governance, permit violence against workers,

or deny workers just wages and tolerable working conditions.

4.) New trade agreements must include strong rules on

environmental protection. As the worlds biggest customer,

the United States can make trade deals to ensure that progress

is made in stopping global warming. Careul trade deals can

also ensure that poor environmental practices do not create

unair competitive advantages, and that those who are willing

to destroy the planet do not prot rom their irresponsibility.

5.) Trade agreements must be negotiated with the understandingthat one size does not ft a ll. Trade agreements must be tailored

to the specic circumstances in the country with which we propose to

trade. We need to be realistic about global dierences in government,

the rule o law, the relative state o countries economies, and the

day-to-day trade and business practices o potential trading partners.

With trade, it is oolish to treat vastly dierent countries the same,

as we do China, with its massive controlled and manipulated

economy; Mexico, with its porous 3000-mile border with the United

States; and developing countries in South America and Arica.



18/32

Whats obvious but oten unspoken whenconsidering how to correct globalizationsunwanted allout is Chinas part inmaking it worse. Glossing over or ignoringChinas role will no longer work.

The Chinese economy has been growing at ten percent a year or

the last 30 years. Such unprecedented economic growth is at the

root o Chinas dramatic surge in military power, international

political weight, and nancial infuence. These developments,

with their economic and geo-political implications, are not simply

the outgrowth o ree market orces and air trade. Rather, they

stem rom sophisticated industrial and mercantilist trade policies

that China has instituted to restore its great power status.

One o the most damaging is currency manipulation: China is

systematically and massively intervening in the oreign exchangemarket to keep its currency undervalued against the dollar. In all,

China has more than two trillion dollars in dollar-denominated oreign

currency reserves, precisely because it intervenes in currency markets

to hold down the value o the yuan. The undervaluation o the Chinese

yuan has contributed to the U.S. trade decit with China and has

hurt U.S. manuacturing. This is so because an undervalued yuan

makes Chinese manuactured goods cheaper in the United States,

while making U.S. manuactured goods more expensive in China.

Undervaluation also encourages U.S. companies to move production

rom here to China and ship goods back to the United States.

As harmul to American interests, China disregards the workplace andenvironmental saeguards that we consider standard. China also steals

strategic technology and ignores patents, trademarks, and copyrights.

35

All together, these actions representa startling offensive against theAmerican economy and way of life.

3

U.S. CHINA TRADE

34

China is systematicallyand massivelyintervening in theforeign exchangemarket to keep itscurrency undervalued

against the dollar.

U.S. CHINA TRADE 3


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By allowing its domestic needs to be met by countereit goods, and

depending on innovators in America and elsewhere to share the latest

technology in exchange or market access, China costs the globalintellectual property industry hundreds o billions o dollars in sales.

Chinas recent public battle with Google reveals its preerence or

censorship. But less well-known policies may be even more destructive,

including its use o opaque approval processes to dictate terms with

oreign businesses, its reliance on State Secrets Laws to protect

competitive and commercial positions, and its pursuit o indigenous

innovation policies. Through these innovation policies, Chinas

government is openly pursuing the goal o increasing production within

its borders o higher value-added goodscomputers, semiconductors,

green technologies, or exampleand increasing exports o these

products. I it succeeds, the indigenous innovation policy will require

U.S. and other oreign companies to transer technologies and patents to

China to have access to Chinas procurement market. In addition, China

has begun restricting the exports o rare earth elements, which are

crucial in producing new high-tech products. The Chinese government

also retaliates eectively against U.S. corporations who object to orced

technology transers and other policies avoring Chinese companies,

eectively co-opting and muzzling many o our largest multinationals.

36

All figures millions in US dollars

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

-80 million

-100 million

-120 million

-140 million

-160 million

-180 million

-200 million

-220 million

-240 million

-260 million

-280 million

U.S. Trade Imbalance with China (2000-2010)All together, these actions represent a startling oensive against the

American economy and way o lie. Yet our government has ailed to

recognize Chinas economic challenge or take the necessary steps to

counter it. We lack a comprehensive, integrated approach to Chinas

commercial policies. In our government, everyone knows just his

or her piece o the elephant; ew to none understand how Chinascommercial policies, business practices, economic and industrial

structures, legal system and military services relate to one another.

In the absence o an integrated approach to these challenges, our

government oten has allowed multinational corporations (M.N.C.s) to

play a key role in setting the trade agenda with China, and they operate

rst in their own best interest: they might l ook the other way when China

violates trade agreements or even discourage U.S. government action

against China or ear o retaliation. The U.S.T.R. is the government body

responsible or taking legal action against other nations trade violations,

but its budget and sta are limited. Oten, the interests o small and

medium-sized businesses, which lack the clout to challenge Chinese

actions or the policy preerences o the M.N.C.s, are compromised.

The U.S. economy as a whole, which has no single voice

in government to advocate or itsel, will continue its

decline unless our leaders in Washington take immediate

action to take on Chinese economic practices.

In our government, everyone knowsjust his or her piece of the elephant;few to none understand how Chinascommercial policies, businesspractices, economic and industrialstructures, legal system and militaryservices relate to one another.

37

U.S. CHINA TRADE 3

Source: US Census



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38

Create an independent body within the WhiteHouse ocused on American competitiveness.

A transparent oce dedicated to gathering independent intelligenceon our trade competitiveness would improve our economic standing.

This body would closely monitor China but would not ocus solely

on it. Rather, it would make sure government agencies share

relevant inormation about trade partners commercial, business,

and industrial practices, and oer guidance to small and medium-

sized enterprises. It also could help our government ormulate a

smart manuacturing strategy and would make U.S. competitiveness

in trade a high priority. In particular, it would align trade and tax

policies so that private sector incentives matched the public interest.

Pursue a variety o initiatives aimed at countering Chinasthet o intellectual property rights, restrictions on theexport o rare-earth minerals, abuse o its centralizedapproval authority, and indigenous innovation policies.

Our government must be willing to challenge and mitigate the

disastrous eects o Chinese economic policies on American

manuacturing and trade. This should start with a clearer ocus rom

the White House, guided by the independent body recommended

above and directed at all ederal agencies. Initiatives should

include bringing cases in the W.T.O., imposing taris when

necessary, and requiring rigorous reviews o Chinas planned

investments in American ports, high technology, markets, natural

resources, telecommunications, and transportation industry.

IMMEDIATE ACTIONS

39

Take action to address Chinas illegal exchange rate practices.

Chinas currency manipulation violates its international obligations

to both the World Trade Organization and the International MonetaryFund, and the U.S. government should le a case in the W.T.O. to counter

them. In addition, the Department o Commerce should orceully oppose

currency undervaluation or Congress should promptly pass legislation

that makes deliberately undervalued currency an illegal export subsidy.

These steps would allow U.S. companies to seek higher taris on goods

coming rom China. Finally, should Chinas ocial designation as a

non-market economy expire in 2016, as some may argue will be the case

under the terms o Chinas Protocol o Accession to the W.T.O., Congress

must assert itsel in any decision regarding Chinas ocial trade status.

Impose taris and bring a series o W.T.O. actions against Chinato address systemic practices that harm the United States.

Our country should bring cases against China that target the

underpinnings o Chinas so-called competitive advantage: its subsidies,

the provision to its State-Owned Enterprises o low-cost capital, its

approval authority, thet o intellectual property, orced technology

transers, lack o transparency, restrictions on Internet reedom,

and state secrets. Treasury Secretary Geithner armed this view in

January when he told a Washington audience that we are actively

using the remedies available under U.S. and international trade laws

to protect our interests. A new bureau within the Justice Department

responsible or enorcing trade laws, as recommended above, shouldtake these actions, including imposing taris when necessary.


U.S. CHINA TRADE 3THE TASK FORCE ON JOB CREATION


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4

INFRASTRUCTURECRISIS

40

Fear about the reliabilityof our energy, water andtransportation systems isdeterring investment insome parts of the country,

interfering with newbusiness investment andjob creation.

INFRASTRUCTURE CRISIS 4

Ater years o under-investing in publicinrastructure, America aces aninrastructure decit o three trillion dollarsthat is impeding economic growth andundermining our economys eciency.

A variety o inrastructure bottleneckstrac-choked roads, clogged-

up ports, an antiquated air transportation system, and an unreliable

electrical gridare costing our economy billions in lost income and

growth. Freight bottlenecks, or example, cost t he American economy

$200 billion a yearthe equivalent o more t han 1.5 percent o

G.D.P., while air trac delays cost us nine billion dollars annually.

Even the inrastructure necessary or inormation technology is

lagging: the United States now ranks 16th in the world in broadband

penetration, while the relative cost o it to Americans is rising. As

well, ear about the reliability o our energy, water and transportation

systems is deterring investment in some parts o the country,

interering with new business investment and job creation.

We need to spend $2.2 trillion over the next ve years to meet Americas

core inrastructure needs, according to the American Society o Civil

Engineers. But actual spending plans all ar short, to less than hal the

41

A one trillion dollar investment innew infrastructure spending annuallyover the next five years would createenough jobs to put the economy backonto the path of full employment.


22/32

America faces an infrastructuredeficit of three trillion dollars thatis impeding economic growth

and undermining oureconomys efficiency.

Broadband Penetration (per 100 inhabitants)

necessary amount. A broad range o vital systemsroads, bridges,

drinking water, rail and inland waterways, energy, and morewill

suer a $1.8 trillion shortall in necessary inrastructure repairs.

These projected inrastructure cuts come at a time when

more than 22 million workers need jobs. To keep pace with

a labor orce that is growing by 150,000 per month, and to

reduce the staggering jobs decit to one that resembles ull

employment, the economy needs to nd more than 30 million

jobs over the next ve yearsor about 500,000 jobs a month.

100

90

80

70

60

50

40

30

20

10

0

Wireless Broadband Fixed Broadband

Korea

Sweden

Japan

Norway

Poland

Ireland

Denmark

Australia

UnitedStates

Switzerland

Luxembourg

Spain

Italy

Iceland

SlovakRepublic

France

UnitedKingdom

Netherlands

Germany

Finland

Portugal

Canada

Hungary

Belgium

43

INFRASTRUCTURE CRISIS 4

Our nation needs long-term investments in inrastructure to create

jobs, spark private investment, stimulate the economy, and trigger

growth in other economic sectors.

Such investments must be at the center o any program to generate

a healthy economic recovery. Inrastructure projects are usually labor

intensive and local, creating jobs or the very people most in need o

worknamely, those who have been laid o rom the housing crash and

those with just a high school education. Investing in inrastructure also

generates a healthy multiplier eect throughout the economy, creating

jobs indirectly in other economic sectors: according to the C.B.O., every

dollar o inrastructure spending generates an estimated $1.60 increase

in G.D.P. Some critical transportation and energy projects may have

even larger multiplier eects; one study concludes that each one billion

dollars o spending on inrastructure can generate up to 40,000 jobs,

directly and indirectly. At this rate, a one trillion dollar investment in new

inrastructure spending annually over the next ve years would create

enough jobs to put the economy back onto the path o ull employment.

.

Inrastructure investment is crucial or other reasons as well. Privatebusinesses, which oten partner with the public organizations

responsible or inrastructure repairs, benet rom lower

transportation and energy costs and relie rom costly bottlenecks.

And new growth sectors in the economy, particularly in energy,

agriculture, and clean technology, require major inrastructure

improvements to develop and keep pace with competitors.

Freight bottlenecks, for example,cost the American economy $200billion a yearthe equivalent ofmore than 1.5 percent of G.D.P.

Source: OECD



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44

Create a National Inrastructure Bank.

The Administration and Congress should move to establish a levered

national inrastructure bank like the one proposed by Senator JohnKerry and Congresswoman Rosa DeLauro. The inrastructure bank

should be an independent nancial institution owned by the government

rather than an arm o an existing agency. Able to und a broad range o

inrastructure projects beyond roads, rails, and runways, it could make

loans and loan guarantees and leverage private capital. It should be

able to sell or issue general purpose bonds to raise unds or lending

and investment, sell specic project bonds when necessary, and invite

private investment along with state and local government contributions.

The bank, consistent with an AAA credit rating, should be able to help

nance up to ten dollars o inrastructure investment or each dollar

o equity capitalization. The nations many large public pension plans

should have a strong interst in providing much o the l evered unds.

IMMEDIATE ACTIONS

45

Create a White House Ofce o Inrastructure Investment.

The Administration needs to coordinate the appropriate ederal

agencies and work with the Treasury, Congress, and state andlocal governments to insure access to unding. The program would

leverage the private capital markets by ensuring t he unctioning o the

municipal bond market and using the Treasurys borrowing powers.

True to the public-private partnership model, private companies

would carry out most projects using the competitive bid process.

Initiate ederal guarantees or municipal bonds orinrastructure projects.

Some state and local governments may question their ability to

issue municipal bonds i their local scal crises worsen. To be

sure the municipal bond market runs smoothly, the Administrationshould seek Treasury authorization to provide ederal guarantees

to state and local governments when necessary to nance

inrastructure projects. Federal guarantees would help lower the

cost o borrowing or state and local governments and thus help

prevent a disruption in inrastructure investment. Eventually, this

unction could be assumed by a national inrastructure bank.

Recreate the Build America Bonds program.

Beore it expired at the close o 2010, this program issued

$181 billion in taxable municipal bonds used by states and

cities or inrastructure improvements. Its success suggests

that Build America Bonds ought to be renewed.


INFRASTRUCTURE CRISIS 4THE TASK FORCE ON JOB CREATION


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5

JOBS IN THEGREEN ECONOMY

46

We have a plentiful supplyof able-bodied workerscarpenters, truck drivers,construction managerswho can do the work these

next-generation jobs demands.

JOBS IN THE GREEN ECONOMY 5

47

We have come to believe, collectively, thatour national dependence on high-pollutingand limited uel sources rom unstableoreign regimes is unsustainable. Reducingdependency on ossil uels has become a global imperative, stirring

demand or new, non-polluting and energy-ecient ways to live. As

with most innovations, whoever gets there rst tends to dominate

the market, and America is not out ront. Leaders in Congress and the

White House must do more to encourage growth in this industry.

Green jobs are those t hat preserve and protect the environment.

The major areas o green development, according to the Center or

American Progress, are wind and solar power, uel-ecient cars, mass

transportation, uels made rom plants, and building retrotting, or

renovating energy-inecient older buildings into cleaner ones.

High-skilled labor is required or this kind o work, and many in

our country who have lost traditional manuacturing jobs have the

necessary skills to do these. Machinists and metal workers, or

example, can build wind arms, while rooers and insulators can turn

old buildings into green ones. We have a plentiul supply o able-bodied

workerscarpenters, truck drivers, construction managerswho

can do the work these next-generation jobs demands. According to

Booz Allen, green projects will create eight million jobs by 2013; the

Global Climate Network puts that number at 20 million by 2030.

We lack a comprehensive policyon clean energy and economicdevelopment.


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We ignore the need to manufacturerenewable energy components herein the United States.

Green jobs alone will not rescue the nations manuacturing sector;

with a total U.S. workorce o 154 million30 million o whom

are out o workgreen jobs employ less than a million workers

in the United States. Yet our nation can do more to promote the

innovation that will lead to higher employment and reduce our

ballooning trade decit. We lack a comprehensive policy on clean

Investment By Country & Sector, 2010(Billions of Dollars)

China

Germany

United States

Italy

Rest of EU-27

Brazil

Canada

Spain

France

India

Japan

Australia

United Kingdom

Mexico

Turkey

Argentina

South Korea

Indonesia

South Africa

0 10 20 30 40 50 60

WIND

SOLAR

OTHER RENEWABLES

BIOFUELS

EFFICIENCY

49

energy and economic development. We ail to oer clean energy

companies tax incentives to build in America. We ignore the need to

manuacture renewable energy components here in the United States.

Our major trading partners have done just the opposite, taking decisive

steps to develop their green industries. Germany oers targetedsubsidies to improve energy-ecient manuacturing. The Japanese

government provides $3.5 billion annually or green R & D and industrial

development. China especially seeks domination o this market, by

prohibiting the import o American and other nations green components,

and requiring domestic manuacturing o all green products. Compared

to Americas $80 billion stimulus or green investment in 2009, the

Chinese government invested $217 billionor $440 billion when so-

called private investments are included. Our nation will continue to

lose jobs and our ability to innovate unless we change course.

Bolstering this segment o our economy will not eliminate unemployment,

but it will put people to work in manuacturing jobs that have the greatestmultiplier eectand will thus stimulate more economic growth.

Source: Pew Environment Group

JOBS IN THE GREEN ECONOMY 5THE TASK FORCE ON JOB CREATION


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50

Extend the Cash Grant Program or renewable energy production.

This program converts non-reundable tax credits or renewable energy

production into cash grants. Previously, renewable energy companieswere able to take advantage o the tax credit, even i they had no t ax

appetite, by entering into tax equity partnerships with entities like

nancial institutions. Because the nancial crisis has shrunk the tax

equity market, renewable energy companies are denied the tax credit

advantage and have seen their business models suer as a result.

Extending the 1603 program until the tax equity market recovers

will help create jobs and avoid urther job loss in the industry.

Lengthen the Advanced Manuacturing Tax Credit (Section 48c).

The American Recovery and Reinvestment Act (ARRA) authorized

up to $2.3 billion in tax credits or investments in qualied advanced

energy projects at manuacturing acilities, such as energy storage,

electricity transmission, energy conservation technologies, and

others. Extending the credit will prompt urther investments.

Expand the Title 17 Loan Guarantee Program.

Title 17 o the Energy Policy Act o 2005 provides ederal loan

guarantees or the construction o energy-related acilities that use

new or signicantly improved technologies that are non-commercial

and have high technological risk. These guarantees signicantly

lower the cost o capital or these projects. Broadening Title 17 to

include energy-eciency investments could help spur this market

and create new jobs in commercial and industrial building, and even

aggregate small-scale investments in residential energy eciency.

IMMEDIATE ACTIONS

51

Find ways to speed the approval process orgreen manuacturing.

Today, companies seeking to build new wind or solar operationsare required to submit environmental impact statements that can

take longer than a year to be approved. Consistent with its interest

in identiying overly burdensome bureaucratic regulations, the

Administration needs to take steps t o expedite this onerous process.


JOBS IN THE GREEN ECONOMY 5THE TASK FORCE ON JOB CREATION


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6

YOUTHUNEMPLOYMENT

52

Among those collegegraduates who do have

jobs, less than half of themare employed in jobs thatrequire a col lege degree.

YOUTH UNEMPLOYMENT 6

53

Millions o American teenagers andyoung adults are in the middle o a vastand ar-reaching unemployment crisis.

Almost 25 percent o teenagers rom 16 to 19 are ocially unemployed.

For young adults aged 20 to 24, unemployment is nearly 16 percenta

number not seen since 1948. For Arican-American and Hispanic teens

in particular, unemployment is that much worse: among Arican-

Americans, 46.5 percent o teenagers and 23 percent o young adults

are jobless; among Hispanics, 30 percent o teenagers and 19 percent o

young adults are out o work. Missing rom these numbers are the many

young people who are discouraged workersthe almost 1.7 million who want

to work but have given up looking and are now outside the labor market.

Summer employment numbers are just as stark. Fewer than 25

percent o 16 to 19-year-olds had jobs in July 2010 versus the more

than 44 percent o this age group who were employed just

ten years beore. In the summer o 2010, less than hal o all 16

to 24-year-olds were employed, though summer months are peak

employment periods or this demographic. In 1989, or example,

nearly 70 percent o 16 to 24-year-olds had summer jobs.

College graduates are also in trouble. Unemployment or college

graduates under the age o 25 rose rom 3.7 percent in April

2007, to 6.8 percent a year later, to eight percent in April 2010.

Even among those college graduates who do have jobs, less

Young people who do not have asuccessful work experience by age25 are at a greatly increased risk oflifelong poverty.


28/32

54

than hal o them are employed in jobs that require a college

degree. The trickledown eect is devastating: the less-educated

requently are displaced by their college-educated peers,

exacerbating the unemployment crisis o the least equipped.

Perhaps most worrisome o all is the daunting explosion in

numbers o young people without school or work. More than ve

million American teens and young adults all into this category o

disconnected youth. That total consists o about 1.5 million young

people without a high school diploma or basic skills; almost two

million with a high school diploma or its equivalent but without real

skills, work experience or a college connection; and an estimated

1.5 million college graduates without employment opportunities,

but with plenty o educational debt. Our society will always include

some who live outside the margins. But economists suggest that

Unemployment rates o young adults andthe total population (1971present)

25%

20%

15%

10%

5%

0%

Workers, age 16-24

All Workers

1970s 1980s 1990s 2000s

For young adults aged 20 to 24,unemployment is nearly 16 percenta number not seen since 1948.

55

YOUTH UNEMPLOYMENT 6

the dismal economy has generated at least two million more

disconnected youth than would develop in prosperous times.

Young adults carry a disproportionate burden o joblessness and can

be aected by unemployment in lasting and prooundly dierent ways

than older adults. Many o the more than ve million disconnected

youth, or example, are at risk o becoming permanently disengagedrom the labor market: young people who do not have a successul

work experience by age 25 are at a greatly increased risk o lielong

poverty. College graduates who have to settle or low-skill, low-paying

jobs earn about 30 to 40 percent less, on average, than they would i

a college degree were required. And economists report that an entire

generation o young people may never ully recover rom this lag: when

new entrants to the workorce get jobs during tough economic times,

they are likely to hold on to depressed wages throughout their careers.

All Americans should be concerned about the spike in youth

unemployment, because we all bear the costs. Millions o young

people who lag in education and work skills ail to earn enough to

provide or themselves and their own young children. The young

and unemployed are much more likely to end up in the criminal

justice system, where annual incarceration costs run in the tens

o thousands o dollars. And when the able-bodied can work, the

economic benets and scal savings include tax revenues in the tens

o thousands o dollars per person, as well as increased economicproductivity. This is especially important as Baby Boomers begin

to retire and our economic dependence on the young grows.

Any society with large numbers o young people without jobs or

options is unstable: creating jobs and preparing young adults or

the workorce must become a major priority, in the White House,

in Congress, and in state capitols across the country.

Any society with large numbers of young

people without jobs or options is unstable.

Source: Bureau of Labor Statistics


6


29/32

56

Extend the Work Opportunity Tax Credit (W.O.T.C.)beyond August 2011.

This law provides small businesses with tax incentives to hire people whomight ordinarily struggle to nd workthose with ew skills, ex-elons,

and some veterans, or example. Congress expanded the tax credit in

2009 to include tax credits or hiring disconnected youththose 16 to

24-yearolds without skills, school or jobs. Our ongoing national youth

unemployment demands that this W.O.T.C. provision be extended well

beyond August o this year. Concerns about W.O.T.C. being abused

as a orm o corporate welarethat businesses can get a tax credit

or hiring someone they would have employed regardlesscan be

oset by tying this tax credit to the Workorce Investment Act (W.I.A.).

Workorce Investment Boards, which receive grants rom the W.I.A., could

oversee how credits and subsidies are used and might be able to oer

credits to employers that partner with them in hiring young people.

IMMEDIATE ACTIONS

57

Integrate Community Colleges Into Workforce Development Efforts.

More than 10 million students already attend hundreds o public

and independent community colleges around the country. Theseinstitutions are ideal places to educate and train young people or

work. Community colleges should be oered incentives to engage

with local businesses and provide more classes that prepare young

people or the jobs and opportunities in their local area. This kind

o partnering with community colleges has been successul in

Sweden, Germany and China. Connecting community colleges to

workorce eorts will better serve young people in need o work.

Establish a Federal Dignity Voucher Program to

Stimulate Demand for Low-Skilled Young Adults.

Modeled on the best practices o successul service voucher programs in

Belgium, Finland, France, and Sweden, a Dignity Voucher program wouldoer ormal work (i.e. tax-paying work) to the low-skilled labor orce

through hours spent providing non-medical personal assistance to elderly

Americans in their homes. This eort would satisy the demands o our

aging population with an equivalent supply o low-skilled labor, and would

capture large losses in tax revenues that disappear in the inormal care

grey market. Proposed by the New America Foundation, this voucher

plan would provide some relie to the millions o amily and other inormal

caregivers who sacrice time and productivity in their own careers,

and oer low-skilled individuals o all ages an opportunity to work.

Create a Stand-Alone Summer Jobs Program for In-School Youth.

The ederal government has ailed to authorize a summer youth programin more than t en years. Nevertheless, summer youth employment

programs complement whats taught in school and oer young people

valuable work experience. When the economy has strengthened, Congress

should consider enacting legislation to create a stand-alone summer

jobs youth program at an authorized amount o $1.5 billion. This would

provide one million summer jobs or young people each year while also

making available more resources to assist youth who are out o school.


YOUTH UNEMPLOYMENT 6THE TASK FORCE ON JOB CREATION


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58

CLOSING SUMMARY

The legitimate fright ofour fellow citizens whowonder if they will be able

to make it in this economyunder these conditions ispalpable.

59

George Orwell amously said, To seewhat is in ront o ones nose needsa constant struggle. Today, the economicstruggles surrounding us are hiding in plain sight.

For all its promise, globalization is grievously hurting thiscountry. The playing eld on which we compete is tilted in

avor o those countries that subsidize their industries, ignore

international treaty obligations, and treat the global marketplace

like one ront in a larger war or international supremacy.

Our own workers, men and women with the ability to manuacture

the goods the world needs, have seen their opportunities disappear.

As America depends on other countries to make the very products

we used to build here, our trade decit grows. Adults with a college

education grab up the jobs that remain, and American teenagers and

young adults without adequate educations cross deeper into our nations

shadows. All the while, what was once a gap between our wealthiest

and most impoverished has grown into a chasm, the greatest ever.

Americans are wondering how they will pay the mortgage, get their

kids through school, and aord the doctor whose rates just went up.

The legitimate right o our ellow citizens who wonder i they will be

able to make it in this economy under these conditions is palpable.

We have come to a clear realization o the act that true individual

reedom cannot exist without economic security and independence,

President Roosevelt told the nation in his last State o the Union address,

beore announcing an economic bill o rights that is as germane today

as when he advanced it. He warned then that, People who are hungry

and out o a job are the stu o which dictatorships are made.

Our leaders today need to heed Mr. Roosevelts words and reverse the

dark trends that seem to propel our nation towards urther decline.

Focus on jobs. Repair our manuacturing sector. Make global trade air

or all. Fix our bridges, roads and railroads. Make America the genesis

o innovation, green and otherwise. Put young people to work.

Engage in that struggle and set things right.

CLOSING SUMMARY


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A Vision for Economic Renewal: An American Jobs Agenda

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