Grand Rapid Press, March 12, 2010, Friday

Grand Rapid Press (Michigan)

March 12, 2010, Friday

Jobs bill too little, too late

Meager plan that would create 200,000 jobs for 15 million unemployed isn't guaranteed to work

BYLINE: Rick Haglund / Grand Rapids Press Detroit Bureau

BODY:
Kalamazoo economist Timothy Bartik has been working for months with lawmakers and public policy groups in Washington on an ambitious effort to jump-start hiring.

But Congress appears ready to settle on a jobs plan that's about as ambitious as The Dude, a stoner played by actor Jeff Bridges in "The Big Lebowski." (Bridges utters the memorable line, "The Dude abides," in the 1998 movie.)

Bartik, a senior economist at the W.E. Upjohn Institute for Employment Research, predicts a jobs bill passed re-cently by the House and Senate would create only 200,000 jobs if President Barack Obama signs it.

"That's better than nothing," Bartik said. "But given that we are about 10 million jobs short of where we need to be, it addresses only a very small portion of the problem."

He's being charitable. The number of jobs that would be created in the bill amounts to little more than a rounding error in the 10 million-plus jobs lost since the start of the recession.

Bartik and John Bishop, a Cornell University human resources expert, last fall proposed giving employers $27 billion in tax credits to hire 5 million workers by the end of 2011.

Obama proposed a more modest plan in January designed to create 1 million jobs.

But the effort in Washington to pass a much-needed jobs bill has been hampered by efforts to overhaul health care, and the inability of Democrats and Republicans to agree on much of anything.

Although both chambers managed to pass the meager jobs bill, the Senate must vote again on it because the House added additional highway spending and minority contracting provisions to the measure.

Meanwhile nearly 15 million Americans, including 693,000 in Michigan, are out of work and desperate for jobs.

The federal jobs bill is being called a "payroll tax holiday" because it waives the 6.2 percent Social Security tax on new hires through the end of the year.

Employers would get an additional $1,000 tax credit for keeping newly hired workers for a full year. The credit is restricted to hiring workers who have been unemployed at least 60 days.

Charles Owens, state director of the National Federation of Independent Business/Michigan, said the tax credit likely would have little impact on hiring.

"Employers don't hire people to get a tax credit. They hire people because they need people," he said.

"What we need are customers and a growing economy so there is a reason to hire folks," Owens said.

A number of government initiatives, including controversial health care legislation, and efforts to tighten labor and environmental regulations are making employers wary of hiring workers, he said.

Even businesses that could hire are having a hard time getting bank loans to help them grow, Owens said.

Manpower Inc.'s national outlook for hiring released Tuesday found 75 percent of business owners say they plan to keep employment levels steady between April and June.

Regrettably, the paltry federal jobs bill won't do much to get those businesses to hire new workers.

Even The Dude would find that difficult to abide.

LOAD-DATE: March 15, 2010