How to get Our Jobs Back

Professor Robert Reich has some ideas on how to improve the job market:

(1) Use existing authority under both the stimulus package enacted earlier this year and the nefarious TARP bailout fund — extending and combining them into a fund to make up for state and local cuts in public school budgets, childrens’ health, public health (we need workers to administer swine flu vaccine) and public transportation. Instead of bailing out banks and giant automakers, we should switch to bailing out public services that average people need.

(2) Propose a one-year payroll tax holiday on the first $20,000 of income. Republicans as well as Blue Dog Dems could go along with this, and it would be a highly progressive tax cut since 80 percent of Americans pay more in payroll taxes than they do in income taxes.

(3) Give small businesses a “new jobs tax credit” for every net new job created over the next year. Granted, under normal circumstances this sort of jobs credit doesn’t have much effect, and it’s difficult to separate hires that would have happened anyway from net new ones. But we’re not in normal circumstances; small businesses, which are responsible for most new jobs, still aren’t hiring. They need a boost.

(4) Dramatically expand the Small Business Administration’s lending programs and have the Fed buy up the SBA’s debt. Big banks are not lending to small businesses. TARP has been an utter failure in this regard. The SBA and the Fed should circumvent them and help small businesses get the capital they need, so they can start hiring again.


14 Responses to “How to get Our Jobs Back”

  1. 1 Amanda Herrera October 5, 2009 at 6:01 PM

    I agree, Robert Reich does give some good possible ideas to help employment. His first idea i like the most since it put things into order of priority. The priority here is put on the average people. This is ideal since most of our nation consists of the average person. In addition, I also found his fourth idea to sounds good. Small Businesses are important since with out them everything would be apart of a chain. This would create impersonal relationships between different people. These are good ideas that make a step closer to fixing this problem.

  2. 2 David Perez October 5, 2009 at 7:07 PM

    I think the points that Mr. Reich is proposing are very good. However, the problem is reaching agreement between the different sides of our country. Nonetheless, I really like his idea on using the remainding stimulus bill to make up for state and local cuts in public school budgets, childrens’ health, and public health. I think that this would prove a little more viable then raising taxes. I also liked the fact that Robert Reich wants to help out the small businesses by giving jobs “tax credit” for every net new job created over the next year.
    I think the small businesses are the most important aspect of our economy. These small businesses can become the next future corporations that fuel our needs and wants with new innovations and ideas. I think small businesses should be put on priority because they help provide quick labor in the service sector of the economy.

  3. 3 Mike Beretta October 6, 2009 at 1:38 PM

    I agree that we should help bail out public services. Too many people are doing without, especially in light of perhaps losing their jobs. The stimulus package did not do what was intended. Giving small business the opportunity to get back into the market will help local economy. Big industries are cutting back and not hiring, so small business could be the best option for many to get hired and retain employment. Since banks aren’t lending to small business, the government could step in to aid these businesses. It’s perhaps the only way for local economies to get back on their feet and support the populace around them.

  4. 4 Deb Snyder October 6, 2009 at 2:24 PM

    Those are some pretty inovative ideas. Without wanting to sound negative, I wonder how much of a chance any of them really have of being approved.

    Idea #2 confuses me, though. The suggestion is that the first $20,000 of income is payroll tax free. That means, in simple terms, that I would not pay the FICA tax of 7.65% out of my paycheck, nor would I pay Federal and State withholding taxes on that amount. I will assume that State Disability would continue.

    The FICA part is simple, the baselines and ceilings that are currently in place would be changed and people would not be taxed on that part. The additional amount into people’s pockets would be $1,530. But now suddenly, Social Security (which is already bankrupt) has that much less funding going into it. Isn’t that like robbing Peter to pay Paul?

    Now, on the tax part – Federal and State. Does this mean that you just don’t have money withheld from your paycheck, but you still owe the taxes at the end of the year? If so, then that is a receipe for disaster. People at the lower ends of the pay structure generally do not have the capacity to save those additional funds to pay in April when taxes are due.

    While I like the idea, conceptually, it just reeks of “get the money now but pay it back later” which would be a sad state of affairs for people that are already struggling to make ends meet.

  5. 5 Alejandro Plascencia October 6, 2009 at 7:40 PM

    Helping out the average payroll is more important than bailing out banks. The reason being that new jobs will give the market more room to breathe. Bailing out business like Ford, or GMC is useless because if they arent able to meet the demands of the public like Toyota and Honda is then they should go out of busniness. Helping out small business will help the [people that find themselves without work therefor helping pout the economy by reducing the number of people on welfare.

  6. 6 Michelle Benton October 7, 2009 at 12:13 PM

    I agree with Debbie. I work in payroll and a couple months back some of our lower income employees called me and told me that we made a mistake on their tax withholding and nothing was being taken out. It turns out that some of the tax relief the Obama Administration approved lowered the tax withholdings so that people would see “more” in their paychecks which they would ultimately spend to stimulate the economy. For these employees, that meant NOTHING was being withheld. This sounds all well and good, but what happens when it comes time to pay their taxes and nothing was withheld from these employees’ paychecks. Now maybe at the time all this happened there was no plan to raise taxes, but now I feel that raising taxes is inevitable. These people are struggling as it is. Many of them use public health programs for their families because they can’t afford our company’s health insurance. Hell, I am starting to have a hard time affording the company’s health insurance. Come tax time, people aren’t going to know what to do.

    So who is going to be buying these Ford and GM cars that aren’t affordable for the average working person (not to mention the unemployed) at this point in time? I agree that they should spend the money in a way that it is not throwing good money after bad. Bad decisions in business should not be rewarded with a “bailout.” Swallow your pride and belly-up like the little guys have to do. Businesses, big and small, that make good decisions should be rewarded. Isn’t that what free market is anyway? If people don’t want your product or you suck at business, you tank, and it makes room for someone else.

  7. 7 Larry Oppenheimer October 8, 2009 at 7:56 PM

    I love Robert Reich. He is a regular commentator on NPR and I find him capable of making very complex economic concepts understandable to a reasonably intelligent lay person. Further, his suggestions, such as those listed in this excerpt, always seem like common sense to me.

    Here, he is emphasizing more direct aid to “the common people,” or what politicians delight in calling “Main Street.” Since we are told that the banking sector is looking like it is on more solid footing now, it is certainly time to help the populace.

    I am confused by his use of the terms “payroll taxes” and “income taxes.” My understanding was that payroll taxes include withholding, which is put towards income taxes, as well as FICA (Medicare and SocialSecurity). What’s the difference between these two terms as he is using them.

    By the way, in reference to the bankruptcy of Social Security, according to a column by Claire More in the April 23 edition of the San Francisco Examiner, “During an episode of Fox and Friends on April 8, co-host Gretchen Carlson inserted the comment, ‘Social Security, already bankrupt…’ into one of her questions. Apparently Gretchen didn’t read the 2008 Social Security trustee’s report which explained that the trust fund would be able to pay benefits until 2041. The report explains that money would be required from the General Fund to cover benefit obligations as the year 2041 approaches. After that date it would still be able to pay 78 percent of benefits if the fund operates without any legislative changes.”

  8. 8 Michelle Benton October 9, 2009 at 7:26 AM

    Larry, you are a great writer. I enjoy reading your posts. Bravo.

  9. 9 Remy Smith-Lewis October 14, 2009 at 9:36 AM

    I think we have to stop outsourcing if we did that, it would bring alot of jobs back here to the USA.

  10. 10 Nubia Cazares October 21, 2009 at 7:37 PM

    I really like Robert Reich’s proposal. I think we need to support and give more towards healtch care and education. The government has lacked the financial support needed. In the past the government has used money for the war and taken away money from public education. The second aspect I liked was his idea of helping small businesses. Small businesses help run our economy, it is because of them that more people are being employed. Especially in the bay area, we are known for entrepeneurship and opening of new businesses. But in order to have our economy continue to flow we have to push to the government to help these businessses continue and not go out of business. This is a crucial part of our economy and if we are already bad without small businessess we would be even worse.

  11. 11 Kali Hardcastle December 6, 2009 at 1:23 PM

    i agree with this article. it definitely seems to direct help to the average person and small businesses. i liked the idea of giving small businesses a tax credit when it creates so many jobs over the course of a year. i think that will help keep small businesses going without allowing monopolies to completely ruin local economies. plus, i agree with the comment that someone said we need to stop outsourcing. this is something we definitely need to do. we need to bring jobs back home to help stimulate our economy because obviously what we are doing now, isnt working.

  12. 12 Josh Highness December 8, 2009 at 2:33 PM

    This is a solid proposal Robert Reich is genius! I liked how he emphasized small businesses and public services rather than bailing out the big banks and other falling industries. These no matter what were going to take more effort to make sure they didn’t collapse where if stimulus money was injected into small businesses there would potentially be room for growth. A tax-free paycheck up to a certain amount of money is also a great idea allowing for lower income families to hopefully sustain themselves better with the extra money in pocket.

  13. 13 Taylor Smith December 12, 2009 at 10:42 PM

    This idea is a really good one. If this can be acted on it would have a positive impact on creating jobs. Small businesses do need help, they are a big part of the local economies and supply many jobs to the public, but if they are having a hard time staying in business they will not be able to hire more people. so small businesses need a break. and the tax free paycheck for the lower income would be a positive thing too, helping the lower income families be able to afford the cost of living.

  14. 14 Caitlin K May 7, 2010 at 3:04 PM

    I would agree that more time and money put into local issues would be spent, and possibly build up the economy from the ground up. And giving businesses money to support more jobs is a good idea; more jobs means more spending.

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