Saturday, September 24, 2011
As America reels from the worst week on Wall Street for three years, economists predicted more gloom on the horizon by claiming Obama's jobs plan will have little to no impact when it comes to improving the employment situation
A range of experts say that the package would not create the projected 1.9 million new jobs in 2012 or lower the 9.1% unemployment level. Heidi Shierholz, economist for the Economic Policy Institute, calculates that it would take job growth of 400,000 every month for three years in a row to get back to the 5% jobless rate last seen in December 2007, at the recession's outset. The economy produced just 20,000 net new jobs in June 2011, 85,000 in July 2011 and none in August 2011. As long as the GDP grows at an annual rate beneath 2.5%, it cannot create enough jobs for new entrants into the workforce, let alone to re-employ those laid off during the downturn, said Martin Regalia, chief economist for the U.S. Chamber of Commerce, the nation's biggest business lobby. The chamber estimates that it will take 20 million jobs over the next decade to get the economy back to pre-recession levels. It has its own jobs plan, which includes increased trade, greater oil drilling, quicker road and bridge construction and temporary corporate tax breaks. "If you want to go from 9.1% down to 5.5 or 6% unemployment, you're going to have to grow roughly at 4.5% (GDP) for three years," Regalia said. "I don't see that in the forecast."