“Nearly one in four construction workers is unemployed and nearly one in four bridges in the region are structurally deficient or functionally obsolete,” Mr Frye said.“We have workers. We have work that needs to be done. What we’re missing is a commitment from Washington to invest in building our country, our state and our workforce.”
According to the BLS, the height of establishment jobs for the last expansion occurred in December of 2007 when there were 137,951,000 establishment jobs. According to the last jobs report, there were 130,242,000, bringing the total number of lost jobs to 7,709,000. Here is a chart of the data:
The construction industry has been hard hit by the recession -- which you would expect coming off of a housing bubble. Total construction employment reached its peak in August 2006 with a total of 7,725,000 construction jobs. The latest employment report showed this total to be 5,573,000 for a total loss of 2,152,000 or 27.91% of all job losses. Here is a chart of the data:
Manufacturing has also been hard-hit by this recession. I think you can guess where I'm going here, so I'll just eyeball the following chart of total manufacturing employment:
Let's call that 2.1 million jobs since roughly the end of 2007, or about 27% of all jobs lost.
So, blue collar jobs lost total over 50% of all job losses during the recession. So, why don't we allocate, say, $500 billion to infrastructure investment and get these people back to work? Make the projects long-term so infrastructure employment will last until private demand takes over in 3-5 years.
Was that so hard?
No need to thank me, Washington, just stop acting like jackasses.
9 comments:
Excellent Idea....quick let's
issue a 10 year bond while the world is asking for only 2.5% per
year.....
It makes too much sense for Washington
Actually, I hear that the GOP will celebrate their upcoming takeover of Congress by shutting down the federal government again in a demonstration to stop out-of-control spending.
So. . . yeah.
Another bailout and more deficit spending... just what we need.
The projects are no economically viable. They don't create any new wealth. When the old bridges are torn down (many still work just fine) and new ones are built, hundreds of billions of dollars would have been spent and all that will need to be paid back with interest, and the much of the spending would have drifted out of the US in the form of imports and higher commodity prices.
Better policy options would be the elimination of the corporate tax for all domestic manufacturing operations and the elimination of the payroll tax altogether (social security will be paid for in the short term from the general fund).
Anon --
And how exactly will we move goods and services throughout out economy exactly? The better a nations infrastructure, the more productive that economy can be. This is econ 101
Let's reverse the course and assume that we have tons of large, well-developed cities with nothing but dirt roads connecting them. How rich would we get?
Reduction of corporate taxes allows that capital to go toward business growth, more productivity, and higher employment. Corporate America can give us a better return on investment of that money than the Government can. Better yet, let's implement the Fair Tax and capture the taxes that are lost from all the illegal immigrants who don't pay taxes.
Let's stop with the redistribution of wealth. The Obamahood (er, Robin Hood) economics is leading down the European path, and that's definitely not a good place to go.
Anon --
The current tax and interest rate environment is hardly restrictive. According to the BEA, corporate investment in equipment and software increased at a 4.2%, 14.6% 20.4% and 24.9% rate over the last four quarters. Businesses are finding plenty of reasons to invest.
Before I move forward, full disclosure is in order. I have a masters in US domestic and international taxation and am writing a dissertation for my doctorate. I am corporate counsel of Synergy Captive Strategies where I deal with corporate tax issues on a daily basis. I am also the author of US Captive Insurance Law, available form IBLS.com.
Corporate investment policy has nothing to do with overall corporate tax rates. It has everything to do with depreciation rates, interest rates and the interest deduction -- see code sections 163, 167 and 168 along with the accompanying Treasury Regulations. These code sections are very generous in the deductions they grant.
In addition, the most popular corporate structure by far is an LLC which passes through its income to the individual. This means that by far, the most important tax rates are individual rather than corporate.
sources for your data?
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