Quick Hit Ashlee Rezin Wednesday February 27th, 2013, 8:35pm

Unemployment Report: Legislative Focus Needs To Be On Job Creation, Not Austerity

Unemployment rates are not expected to improve for white, Latino and African American workers through 2013, according to a new report from the Economic Policy Institute, prompting a recommendation for legislators that focus more on job creation.

“In the fourth quarter of 2012, nationwide unemployment rates were 6.3 percent for whites, 9.8 percent for Hispanics, and 14 percent for blacks. These elevated rates are projected to remain essentially unchanged at the end of 2013,” the report reads.

As of December, the unemployment rate for Illinois was 8.7 percent. The rate of unemployment for the state's African American population was 17.6 percent, while 9.7 percent of Hispanics were unemployed. The rate of unemployed whites fell to 7 percent.

At the end of 2012, Illinois had the third highest unemployment rate for African Americans in the nation.

Illinois’ 2013 unemployment rate for whites and Hispanics is projected to stay consistent with 2012, according to the Economic Policy Institute. But the rate for African Americans is expected to decrease to 13.9 percent, but still stay above the national average.

The report suggests “our leaders have gotten sidetracked by potentially harmful calls for deficit reduction" and should instead borrow money to “invest heavily in infrastructure improvements, which create large numbers of jobs and stimulate the economy.”

“Policymakers need to focus on jobs now, and on deficits only after we have a strong economy,” the report reads. The Washington-based Economic Policy Institute is a non-profit think tank often presenting a liberal viewpoint on economic issues.

According to the author of the report, Algernon Austin, director of the program on race, ethnicity and economy at the Economic Policy Institute, infrastructure spending has a “big bang for your buck” and would positively stimulate the economy.

“That means we could put a lot of unemployed construction workers to work right now, and way into the future, infrastructure investments lead to higher productivity, it’s a win-win,” he said. “The borrowing costs are quite low for the government right now, the smart thing at the federal level is to borrow investment for infrastructure, put people back to work and ensure long-term strong economic productivity.”

But the start of 2013 has seen an impending sequester take the primary focus for most congressional legislators. The $1.2 trillion package of spending cuts over the next decade is set to kick in March 1, which is just days away.

Cuts from the sequester will add up to $85 billion this year, just more than 2 percent of the total federal budget. But the possible consequences of the cuts include drastic layoffs, a delay in disability payments and severe cuts to programs, such as Head Start.

“The problem is, the economy isn’t growing right now because the government is cutting too deeply,” said Robert Bruno, professor of labor and employment relations at the University of Illinois at Chicago. “They’re actually generating unemployment because they’re laying off state employees and teachers.”

Bruno said the government isn’t using its employment generating capacity and is instead focusing too much on cuts and the federal deficit.

“There’s always unmet needs and the government simply isn’t making the investment that it should,” he said.

“They’re just going to further aggravate the situation that currently exists because it’s going to end in a higher unemployment rate,” he said.

Jobs with Justice and American Rights at Work Executive Director, Sarita Gupta, agreed that cutting economic development programs prevents American workers from getting back on their feet and participating in the nation's economic recovery.

"We agree that the answer to our country's budget problems doesn't lie in an austerity agenda," she said. "The working people of America need jobs — good jobs that pay a living wage, and offer benefits like health insurance, earned sick leave, normal hours and the right to organize and bargain collectively."

Boasting coalitions in more than 40 cities, Jobs With Justice is a union advocate and workers' rights organization.

"We're going to continue to work hard to advocate for more jobs, not cuts."


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