Economy

Unemployment and Obama -- All Joblessness Is Local

Douglas A. McIntyre

President Obama is set to unveil his new jobs packages. They are meant to bring down unemployment from above 9%, where it has been since just after the start of the recession. His probable plans do not acknowledge that joblessness in the U.S. is a local and not a national problem. A few, specific geographic areas spread around America need attention.

The Obama plans probably will include tax incentives to encourage companies to add workers. It is also likely that he will suggest establishing an infrastructure bank, which will invest in projects such as upgrades of America’s bridges and highways. The bank would offer capital to companies that add jobs to shore up the crumbling U.S. infrastructure. Like any of these projects, it will take months, at best, to organize the bank and make it viable. Congress also may reject the plan as too expensive. Even if Congress approves the necessary measures, companies will be tempted to take the money and do the work while adding as few people as possible. That has been the pattern as businesses hedge the risk of another downturn.

That 9% unemployment is not spread evenly around the U.S. In some states, joblessness is below 6%, such as Oklahoma, Vermont and Iowa. In other states, unemployment is above 10% — Florida, Michigan, Nevada and California. But the problem is even more local than the state level. Metropolitan areas in California, Nevada, Michigan, Ohio, Florida and South Caroline have unemployment above 11%, and in some cases as high as 14%. The total populations in these pockets number as high as five million people. If the jobless rate in these areas dropped below the national average, it would offer relief to tens of thousands of families, turn them back into consumers and eliminate the government costs to support them financially.

An infrastructure bank will help create jobs where there are tremendous infrastructure problems that need to be fixed. Those may not be in the mid-region of California, in Flint or Youngstown, or in towns close to the Mexican border in south Texas. Any plan that passes those regions by leaves part of America mired in what increasingly appears to be an endless recession. Any national programs will largely miss their marks.

Douglas A. McIntyre