Putting People Directly to Work Is “Too Radical” For Congress

Still, there really are job-creation ideas out there. Really. Here's another one.

By Shani O. Hilton Jun 17, 2011

All summer Colorlines is [exploring how and why](http://colorlines.com/archives/2011/05/deficit_hawks_preventing_job_creation.html) Washington has been so unwilling to take real action in the face of such a dramatic, lingering [jobs crisis](http://colorlines.com/jobs-crisis/). There are, in fact, solutions to this crisis; they just aren’t politically viable. Earlier this week, we dug up a few [job-creation projects that are collecting dust](http://colorlines.com/archives/2011/06/suddenly_everyone_cares_about_job_creation.html) while Washington prevaricates on the unemployment crisis. Infrastructure spending–bridges and roads and high-speed rail–generates up to $1.60 in new economic activity per dollar spent, according to economists, and cities across the country have projects just waiting for funding to get started. But there’s an idea that’s even better than infrastructure, says Heather McGhee, director of the Washington office of [Demos](http://www.demos.org/), a nonpartisan think tank. "Direct hiring is the most cost efficient," McGhee says, referring to programs where the government hires people itself. And she points to a few downsides of infrastructure spending: "While infrastructure spending immediately affects the contracting companies and the communities where investments are being made, [it’s] is very place-based. It still takes a while to cycle through the economy." Infrastructure has to be designed and planned before anyone (and mainly male workers, by most estimates) breaks ground. Alternatively, McGhee says, "With direct hiring, you can target it to regions where the unemployment rate is the highest." This, she adds, is crucial if we’re going to start taking full employment as a serious goal. Direct hiring, however, has been getting even less exposure than the infrastructure spending. Maybe that’s because no one knows how to make it work and get political traction. Michigan Democrat John Conyers, the second-longest serving member in Congress, has the first part of that equation down. He’s introduced H.R. 870, "The Humphrey-Hawkins 21st Century Full Employment and Training Act," a bill that would put more than five million unemployed Americans to work, let citizens and local communities determine how best people should be employed, and give the long-term unemployed–people whose job skills are growing rustier by the month–the job training they need to help get back up to speed and employable. Sounds too good to be true, right? Our deficit-obsessed media and Congress will want to know how much this is going to cost. Well, setting aside the fact that economists have explained that unemployment increases the deficit–and that spending is necessary to create jobs–consider this: H.R. 870 is completely paid for with taxes on the richest financial speculators. The bill’s hiring and training programs would be paid for from a trust that’s funded by "a tax that taxes the purchase and selling of credit default swaps," says Michael Darner, Conyers’ spokesperson. Credit default swaps are a kind of financial insurance for lenders, and something that amateur investors don’t really trade. "If you’re a speculator who’s flipping these things and selling thousands of them every day, you’re going to be paying the bulk of [the tax]," Darner says. Darner estimates that H.R. 870 would lead to four million people immediately getting hired by the government, followed by another 1.6 million jobs created indirectly in the private sector, but he admits it’s "probably too radical" to make it past the Senate. McGhee agrees: "It’s ‘too radical’ in a Congress where ending the Bush tax cuts is ‘too radical,’ even though 75 percent of Americans support that." Still, Darner says, "The argument that Mr. Conyers is making is that this is what is needed. If we were really serious about creating a society where people who want to work can work, this is what we would need to do."