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American Workers Need Employment Benefits

American Workers Need Employment Benefits

Frank F. Islam

Frank F. Islam

What is needed at this time is a massive and targeted jobs bill. The goal for that bill should be: To put American Workers back to meaningful work in full-time jobs in as short a time frame as possible.

The jobs bill should be thought of as an employment benefits bill and an alternative to unemployment benefits. Unemployment benefits are definitely necessary as transitional tools.

They are not job creators, however, and do not restore the dignity that only a job can provide. Employment benefits do that by promoting a sense of independence and self-sufficiency.

We made that recommendation and observation in a blog posted on May 27. We share those thoughts again because the need for such a bill and employment benefits are even greater than they were just a little over two months ago. And sadly, that need may very well intensify through the end of this year and into 2021.

In May and June, it appeared that the economy was starting to rebound and jobs were coming back a little quicker than expected. That was due to the impact of the financial assistance provided through the CARES Act and the premature reopening in a number of states.

The virus proved the rapid re-opening was a mistake, as was the unwarranted belief that a recovery was imminent. To show where things stand today and what might be in store in the future, consider the following:

That is not a pessimistic assessment. It is a realistic assessment. That is because it is based upon fact rather than fiction.

Fiction is Donald Trump’s continuously asserting that one day Covid-19 will just magically disappear. Or, Larry Kudlow, Director of the United States National Economic Council, asserting on Sunday, July 26 — in spite of all the evidence to the contrary — that a “V-shaped recovery is still in place” for the American economy.

The only place that recovery is taking place is in Director Kudlow’s head. When the economic impact was first felt, there was some speculation that this might be a V-shaped recession.

That speculation is over. The V-shape has been thrown out the window.

Opinions among economists now vary as to whether this recession/depression will be W-shaped, U-shaped or L-shaped. None of these shapes will be good for the American economy or American workers.

In fact, they will most likely be very bad. Because, as Robert Samuelson of the Washington Post writes, drawing upon work and words of economists Carmen Reinhart and Vincent Reinhart, we are in a “pandemic depression.”

In all fairness to Mr. Kudlow, he has not been the only one in denial regarding the true state of the American economy. Senate Republicans have been in this delusional mode along with him.

That’s the only plausible — although not acceptable — reason for their not even considering an extension of the supplemental unemployment benefits of $600 per week provided through the CARES Act until about ten days before they were to expire on July 31. The $3 trillion HEROES stimulus package that the Democratic House passed on May 27 extended the $600 per week supplemental benefits through January 31, 2021.

The Republican senators were not only slow to act. They were also extremely stingy in the extension of unemployment benefits they proposed in their 1 trillion HEALS Act. The Act called for extending the supplemental benefits at $200 per week for August and September and then requiring each state to transition to a system offering a 70 percent wage replacement benefit and encouraging workers to return to the jobs.

This stimulus package might be called the HEALS Act. That’s a misnomer. What the Republican senators did, with the significant reduction of the benefits that would be provided through the Act, was to put their HEELS directly on the economic jugulars of American workers.

The Senate Republicans apparently decided to proceed in this manner because a group of their colleagues felt that unemployed workers were “gaming” the system. These senators thought laid-off employees were not returning to work because the benefits they were receiving were more than the wages they would be paid on their jobs. That was the senators’ opinion, based on no data.

A study by Yale economists found data did not support that opinion. In fact, it showed the opposite.

The Yale study conducted using data gathered between March 22 and for six weeks until early May concluded;

…We find that workers facing larger expansions in UI benefits have returned to their previous jobs at similar rates as others. We find no evidence that more generous benefits disincentivized work either at the onset of the expansion (CARES Act) or as firms looked to return to work over time.

The Yale study was not an outlier. As Catherine Rampell of the Washington Post reports, there are four other economic studies that present similar conclusions.

The Republican senators’ underestimation of the resilience and tenacity of the American worker, and their failure to act in a timely manner on their behalf, is inexcusable. It has put tens of millions of those without jobs into economic limbo.

Democratic leaders Nancy Pelosi and Chuck Schumer, Treasury Secretary Steve Mnuchin, and White House Chief of Staff Mark Meadows met beginning in late July to try to try to agree on the scope and content of a new stimulus package. After prolonged discussions, there was a deadlock and the meetings came to a grinding halt on August 7. Each side blamed the other for the failure to reach a deal.

Shortly after the collapse of the congressional negotiations was announced, President Trump held a “press conference” at his Trump National Golf Club in Bedminster, N.J. This conference, which appeared to be as much a campaign rally as a news briefing, was attended by reporters and members of the golf club.

In this session, Trump said he was considering using executive orders to do a number of things, one of which was providing some form of enhanced unemployment benefits. No specifics were given, however.

The next day he signed four executive orders — one of which would deliver additional unemployment benefits at a reduced rate of $400/week, versus the $600 furnished through the CARES Act. The states would have to provide 25% of that amount.

Some states may decide not to participate. And because this is a new program, it would require an alternative delivery system for those payments and would be extremely difficult to implement.

There is a question whether the President can legally take this executive action on unemployment aid. There is no question that if it is legal, the dollars available will be insufficient to meet the need. They will not pull those unemployed citizens who have become the unwitting and unwilling pawns in these political negotiations and presidential showmanship out of their economic limbo.

So, the remaining question, at this point, is when and if a new stimulus package will be implemented that will be scaled to the size of the need. The best case is that it will be sometime in the near term. The worst case is that there will be no package.

If there is no new package, the American economy writ large will collapse, as it has been artificially propped up and supported in its initial recovery by earlier stimulus funds. Our fondest hope for this country and its citizens is that there is a package which includes robust unemployment benefits.

Even if there is one, it will only meet part of the need for those who are unemployed. It will not address the underlying need of enabling and empowering them to go back to work.

That will require a targeted and massive jobs bill. As noted in our earlier blog, that bill should be comprehensive and include, but not be limited to, the following essential components:

There are numerous other recommendations that have been advanced that can be used to make the jobs bill as robust as it will need to be to help rebuild the American economy. Here are a few:

All of these are serious and substantive improvement proposals which would create jobs and enhance employment benefits. There is another recent proposal to help the American Worker that received a fair amount of publicity but was neither serious nor substantive.

It is the “Find Something New” initiative rolled out by the White House on July 14, an ad campaign and website designed to promote the benefits of skills training for careers in rising occupations that don’t require college degrees, such as computer support specialist, line installer, and registered nurse.

The initiative was spawned by the President’s National Council for the American Worker Executive Order. That Order issued on July 19, 2018 established the American Workforce Policy Advisory Board (Board) which is co-chaired by Ivanka Trump, Advisor to the President, and Wilbur Ross, Secretary of the Department of Commerce.

The Find Something New announcement and campaign were roundly criticized in social media as “tone deaf” and “clueless,” given what was and is going on in the American economy and for the American worker due to COVID-19. As importantly, these actions were not relevant to the mission of this Board, which is “…to provide a coordinated process for developing a national strategy to ensure that America’s students and workers have access to affordable, relevant and innovative education and job training…”

An ad campaign is not a national strategy. A listing of available programs and options for skills training does not guarantee their accessibility or affordability. Find Something New is smoke and mirrors, when what is needed are bridges and paths forward.

In conclusion, there is much work that needs to be done to deliver adequate employment benefits for the American worker. PPP is a starting line but not anywhere near the finish line.

The current economic conditions and problems have already outstripped the Great Recession of a little more than a decade ago and are beginning to rival the Great Depression of the 1930’s. Noted Harvard Professor Kenneth Rogoff — an expert on economic crises — has declared: “We are going to clock the worst recession since the Great Depression, regardless of how fast we bounce back. The virus is coming back, hard and fast. It really does look like this is going to have profound long-term impacts.”

As we noted in our earlier jobs post, during the time of the Great Depression, President Franklin Delano Roosevelt’s New Deal was centered on the 3 R’s: Relief, Recovery and Reform. The United States, American businesses, and American workers are still in the Relief phase.

This new stimulus package will continue that relief until we can gain control over the virus, which today is still controlling us. After that, a robust jobs bill will move the country and the American workers into the Recovery phase. And from there we can move on to the Reform phase and an American Renewal Plan to reverse the forces of repression and regression that hamstring our democracy today.

The American workers have made this journey before. They are prepared and want to make it again. If given the opportunity and the benefit of employment, they will do the hard work required to ensure that America remains and becomes an even better land of opportunity for all.

Himachal signs MoUs to attract over Rs 17,000 crore investment

Himachal signs MoUs to attract over Rs 17,000 crore investment

Himachal signs MoUs to attract over Rs 17,000 crore investmentShimla : Himachal Pradesh on Monday signed memorandum of understanding (MoU) with 159 companies that will attract an investment of over Rs 17,000 crore and provide employment opportunities to 40,000 people, the government said.

It said three MoUs were signed with PSUs (public sector undertakings) for an investment of Rs 1,115 crore; 88 for the Department of Industries for Rs 5,243 crore; 36 for the Department of Tourism and Civil Aviation for Rs 2,810 crore; 17 for the Department of Urban Development for Rs 4,332 crore; and five for the Department of Transport for an investment of Rs 2,780 crore, among others.

Speaking on the occasion, Chief Minister Jai Ram Thakur said the state was coming up with new policies for industry, tourism, warehouse and logistics, information technology, e-vehicles, films and Ayush to provide more attractive incentives to the entrepreneurs.

Presiding over the MoU signing ceremony here under the Himachal Pradesh Global Investors Meet, he said efforts would be made to ensure online clearances under Section 118 to ensure fast clearances of the projects.

Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act of 1972 makes permission mandatory for non-agriculturists in the state to buy property other than what is offered by the state housing board.

Thakur said a holistic approach had been adopted by the government to attract investments.

He said the state offers great scope for investment in sectors like tourism, education, healthcare and food processing.

The Chief Minister said the new industrial policy aims to establish state-of-the-art infrastructure, promote the manufacturing sector, enhance inclusivity, foster innovation and create employment opportunities across the sectors.

He said the entrepreneurs willing to set up new industry or undertaking expansion would be entitled to 30 per cent Capital Investment Subsidy subject to a maximum of Rs 5 crore on plant and machinery under the Industrial Development Scheme of the Government of India.

He said the state government would be holding the Global Investors Meet in June in Dharamsala.

Industries Minister Bikram Singh Thakur said the state was committed to make sustainable tourism one of the prime engines of growth by establishing it as a leading global sustainable tourism destination.

—IANS

Cabinet approves 10% quota provision for J&K

Cabinet approves 10% quota provision for J&K

Modi Cabinet approves 10% quota provision for J&KNew Delhi : Union cabinet has given its nod to 10 per cent quota for poor among the general categories in Jammu and Kashmir and also approved the provision for SC/ST reservation in promotion in government jobs in the state.

Minister of State in PMO Jitendra Singh said since Jammu and Kashmir is under the President’s Rule, the Cabinet on Tuesday in its meeting took these decisions.

Talking to reporters here at his official residence, Singh thanked Prime Minister Narendra Modi and said it will help a certain section of society which belongs to lower economic strata and will benefit equally Jammu and Kashmir like other states.

He said the government had introduced the provision of reservation in promotion for Scheduled Castes and Scheduled Tribes.

“That too has been approved for Jammu and Kashmir,” he said.

“It will enable Jammu and Kashmir to be beneficiaries of the same public welfare measures for the benefit of the weaker sections that PM Modi initiated for the rest of the country,” he said.

Hailing the decision Singh said that these decisions show the Prime Minister’s extremely sensitive concern for the state.

“In the last 65 years, no earlier government had ever taken an initiative on these lines and even now these decisions have come forth in the interest of the state because of the Modi Government being at the helm at the Centre,” he said.

The Union Cabinet had in January this year took the decision to provide for 10 per cent quota for people belonging to ‘unreserved categories’, including Christians and Muslims, in jobs and education with an annual income limit of Rs 8 lakh and land-holding ceiling of about five acres, highly-placed sources said.

A Constitution Amendment bill for the purpose was recently passed by the Parliament.

—IANS

Infosys to train students in US for digital jobs

Infosys to train students in US for digital jobs

InfosysBengaluru : Infosys is partnering with the Community College of Rhode Island to set up a digital economy aspirations lab for training students in the US for digital jobs, said the software major on Wednesday.

“Our digital innovation and design centre at Providence in Rhode Island will help bridge the gap for design and human-centric skills and provide digital technologies to our clients,” said the city-based IT firm in a statement here.

The centre offers designers and design graduates training in digital skills, exposure to systems, platforms, strategy and organisation domains to make them employable in a digital world.

The $11-billion IT behemoth has so far hired 100 techies as part of its goal to create 500 jobs in the northeastern state by 2022.

“We have hired 7,600 American workers since spring 2017 as part of our commitment to speed up digital innovation of enterprise clients in the US,” said the statement.

—IANS

EPF enrolment, Income tax data cannot measure job creation: Experts

EPF enrolment, Income tax data cannot measure job creation: Experts

Job, Employment, VegitableBy Saurabh Katkurwar,

New Delhi : Amid the controversy over the withholding of a report on the country’s unemployment situation, the government has cited data from provident fund records, Income Tax filings and the National Pension System (NPS), besides a possible upswing in the informal sector to show generation of crores of new jobs.

However, this does not mean there is an increase in the jobs, experts say.

During his reply on the motion of thanks on the President’s address in the Lok Sabha on Thursday, Prime Minister Narendra Modi said new jobs were created in the unorganised sector, which accounts for 80-85 per cent employment, citing an increase in the sale of commercial vehicles, infrastructure building and housing activities.

He said about 1.8 crore people had enrolled in the Employees’ Provident Fund (EPF) in the past 15 months, and 64 per cent of them, who were below the age of 28 were first-time employees.

Modi also cited the data showing increase in the registration of employees under the National Pension Scheme (NPS) from 65 lakh in March 2014 to 1.2 crore till October 2018.

Considering the EPF enrolments as a reflector of job creation is not correct as it can be formalisation of informal jobs, said Mahesh Vyas, Chief Executive Officer of Centre for Monitoring Indian Economy (CMIE), a think tank.

“When a person enrols for the EPF, it does not necessarily mean that the person has got a job. It is quite likely that you have enrolled for the the EPF for the first time though you had a job for a long time,” he said.

“The law requires an employer with 20 people or more to register with the EPFO. If a firm has got 19 employees till yesterday and today 20th person joins in, then all 20 get enrolled for the first time. So it looks like employment has gone up by 20 when actually it is one.”

Another expert, who did not wish to be named, said there cannot be a correlation between EPF enrolment and job creation “since it has so many moving parts and variables, so one could interpret it differently”.

Modi also had said that new 6.35 lakh new non-corporate tax payers such as doctors must have provided jobs in past four years. The expert called it “incomprehensible” in the absence of the source of the data.

In his speech, the Prime Minister said he expected over 1.25 crore people have got jobs in the transport sector with the sale of 36 lakh commercial vehicles and 27 lakh auto-rickshaws.

He also cited setting up of two lakh service call centres, infrastructure building, hotel constructions and housing activities for the creation of employment in the country.

Vyas said if a farmer takes up a labourer’ job or moves to driving a truck, it cannot be considered a new job.

According to the CMIE statistics, India’s unemployment rate shot up to 7.4 per cent in December, 2018 and the number of unemployed increased by a substantial 11 million – the highest in 15 months.

Modi had taken a dig at the past governments for failing to establish standard system to tally employment and said only 7-8 sectors were taken into account to arrive at the employment rate when, in reality, jobs were created in 100-odd sectors.

Vyas said Modi was possibly referring to enterprise survey conducted by the Labour Ministry, which is one of the ways to estimate employment.

“That is not the best way to estimate employment and unemployment in country like India. But what the Prime Minister did not mention was that India also conducted a large house-hold survey. It is the most appropriate way of computing it and will capture all sectors. He is partially right but selective in the kind of survey done,” he said.

“The traditional way, which is a good way of calculating employment and unemployment, is the NSSO household survey,” he added.

The National Sample Survey Organisation (NSSO) report, which the government has withheld, said the unemployment rate was 6.1 per cent in 2017-18, post-demonetisation and was at its highest level since 1972-73 – the period since when the jobs data is comparable.

(Saurabh Katkurwar can be contacted at saurabh.k@ians.in)

—IANS