The economic recession has spared no targets or class. However, as far as recessions go, it is still reasonably early in this one. From blue collar to white, from the middle manager to the assembly line worker, to the construction to the financial sectors, a wide net of reductions, layoffs, and financial downfall has caught many. Joblessness is on the rise across the board, and estimates paint even more of a dire picture for the immediate future.
The U.S. government reported that white collar unemployment escalated from 1.6% to 4.6% during the span of December 2007 to December 2008. However, blue-collar workers are still bearing the largest brunt of unemployment, at 11.3 percent.
The Obama administration’s stimulus plan has many target recipients– some say too many with too much, but all seem to agree that significant help from the U.S. government is needed. Its cast net is wide reaching as are the losses in multiple industries, affecting a wide range of workers. The $800 billion-plus rescue package put together by President Barack Obama and congressional Democrats calls for $50 billion in rebuilding the nation’s infrastructure of roads, bridges and schools, directly addressing the hardest hit of the unemployed first: blue collar construction workers. Also allocated is $62 billion for health information and renewable energy technology, as well as improving the nation’s power grid and scientific research, aiding the white collar middle class base. Critics of the plan say that these efforts will not stimulate the economy at a fast enough pace, others argue that a short term injection will only produce short term results. Public policy makers in Washington are hoping to appeal to Congress for passage of the plans via the woes of the public by including social spending elements like food stamps, unemployment assistance, and health insurance. Their logic is that these social spending elements are now necessary for more than just the low wage earners that needed it in the past, but now for a larger percentage of the population, as the recession reaches across multiple social levels in the country.
Case and point, home foreclosure levels are reported to be as high with lower and middle class income levels as with lower income workers.
Critics of the proposed bill, including Republicans in the House and Senate, argue that the plan is focused too much on creating a safety net for victims whose rescue will not produce revenue or jobs. Other approaches feature tax cuts oriented towards businesses which could create more jobs faster and have a more sustainable effect for the country. At the core of Obama’s plan and competing plans is job creation; all agree that bringing back jobs is a number one priority. Spending on essentials which is markedly down, and discretionary spending, (non-essentials, including items like new televisions and automobiles) is at near depression levels in some states, due to lower income levels and unemployment.
The Obama administration’s economic team recently concluded that spending elements in the bill would directly create nearly 1.5 million jobs by the end of the fourth quarter of 2010. Indirect benefits of the jobs would create another 2.2 million jobs. According to some media sources and estimates, industries in the target of the spending report include 305,000 in direct energy jobs and 166,000 in direct health care jobs with spin-off job creation of an additional 230,000 jobs.
Reportedly, major industry targets of the spending are environmental technologies, IT technologies, health care, medical facilities and hospitals, and pharmaceutical and bio-tech firms. But the targeted spending in these areas must produce what economic experts hope for: increase commerce and a capture of the lost business, or the job creation factor will not materialize.
Many critics of the plan argue that spending on large infrastructure plans will not generate economic activity at a quick enough pace, and that the spending and investment rate in these industries will not even be fast enough. The Obama administration’s plans call for approximately 75% of the bill’s proceeds to be spent in the first year half of the bill’s passage, while the Congressional Budget Office released reports that $525.5 billion of the $816 billion in the House stimulus bill would be spent in the first two years. They have stated that certain federal agencies may not be equipped to handle the large influx of money and will be forced to put off billions in spending by one, two, or more years.
Many economists express concerns that the longer the nation is in economic despair, the losses of housing, jobs, and residual elements will grow larger, making a recovery more difficult. Many point to Japan’s lost decade when early efforts to confront its economic recession were not effective, major mistakes by government were made, and the situation developed into a deepening negative economic environment that permeated for a decade.Pages: