Business
America readies for Obama’s jobs speech
* Keeping emergency unemployment benefits for another year. Unemployment checks put money in the hands of people who are likely to spend it immediately, helping businesses and making them more likely to hire.
Macroeconomic Advisers estimates that another year of emergency unemployment benefits would support 200,000 jobs in 2012.
Critics say unemployment benefits discourage some people from aggressively seeking work. Researchers at the Federal Reserve Bank of San Francisco have concluded that unemployment benefits keep the unemployment rate about 0.4 percentage point higher than it would be otherwise.
The unemployed used to get 26 weeks of benefits. During the recession, Congress extended it to as much as 99 weeks, almost two years, in states with high unemployment.
Obama may back a national version of a Georgia program that encourages businesses to provide on-the-job training for people receiving unemployment benefits. About a third of the time, the workers wind up getting hired full-time.
* Offering tax incentives to businesses to hire the unemployed. Under consideration is an expanded version of a law passed last year that encouraged companies to hire the unemployed. The law exempted employers from paying their share of the Social Security tax when they created jobs for those unemployed for at least two months.
But economists say the law didn’t boost hiring much.
Rajeev Dhawan, director of Georgia State University’s economic forecasting center, says the tax break might encourage employers to hire workers they didn’t need, which would be inefficient. Or, he says, it could give them a tax break for something they were going to do anyway.
* Spending more on public works. Obama’s proposals will probably include spending on roads and other infrastructure programs and add to the deficit. And he’s expected to call for as much as $50 billion for school construction and renovation.
But public works programs can take years to get started and create jobs.
“Infrastructure spending cannot jump start near-term hiring unless ramped up at a pace and a scale that, outside of wartime, would be unprecedented,” Macroeconomic Advisers concluded in a report.
Some businesses would welcome it anyway.
Dyke Messenger, CEO of a construction equipment firm called PowerCurbers in Salisbury, N.C., says new infrastructure spending could help his business, and embolden him to hire more people. He employs 85 now.
He says his customers, construction companies, will not order more of his machines “until they can see a steady supply of work ahead of them.”
“I’m not going to hire somebody unless I’m absolutely sure I’ve got work for them, period,” Messenger says.
Copyright 2011 The Associated Press.
