Monday, December 13, 2010

Election Promises and the Unemployment Predicament

By sameh abdelaziz

The time for easy promises, flashy sound bites, and unchallenged insults is over. The midterm election produced distinct winners and losers. Now is not the time to revive old glories or pretend that the election results present clear marching orders, because, after all, the outcome is a divided government. The incoming Republican congress will have to collaborate with a Democratic Senate and White House to achieve any goals. The need for effective governance comes at a time when 46% of the 14.8 million jobless Americans have been out of work for more than 27 weeks, according to the latest economic release by Department Of Labor (Bureau of Labor Statistics).

Therefore, while we still have time until the next election, let us examine the wining promises of 2010 and try to understand their potential impact on Georgia and the rest of the country. The 2010 election season focused on two major themes: a relentlessly weak economy diminishing the traditional American dream and an unequivocally proactive government drowning the country in debt.

The prevailing theory is that the weak economy is a reflection of a historically high unemployment rate of 9.6% nationally, and over 10% in Georgia. The weak economy and the high unemployment rates are direct results of the private sector's reluctance to reinvest in an environment of excessive regulations and uncertainty. The regulation overburden and uncertainty is only the tip of an iceberg represented by a big proactive government that is hard at work to change America as we know it and love it. Health care, cars, and banks are just a few examples of government takeovers. Americans voted, or at least 42% of the registered voters went to the polls, and stopped the tyranny, brought in a new team that will govern less, spend less, create more jobs, and deliver prosperity to America.

The challenge with job creation, ignored by the two parties, is a job - never a generic abstract. A private or public job opening requires a specific set of skills and qualifications to meet certain market needs. The job specific requirements mean that if tomorrow the government decides to abandon all regulations and the private sector suddenly discovers a dire need for a million scientists, the unemployment rate will not budge as long as all qualified individuals already have jobs. Subsequently, the only means to bring down unemployment is to create the proper jobs for the available skills or to retrain the work force.

The first step on the road to improve employment will require close analysis of the skill set of the 14.8 million unemployed Americans. According to the Department Of Labor, the 9.6% national unemployment rate consists of four different categories. The percentage of unemployed Americans with less than a high school Diploma is 15.3%; the unemployment rate for high school graduates stands at 10.1%; people with some college or an associate degree fared better at 8.5%, and only 4.7% of Americans with a Bachelor degree or higher were unemployed. These statistics demonstrate that only jobs in industries that require a minimum level of academic education might improve employment numbers. The major industry employing people with these qualifications is the construction industry, which came to a complete halt by the 2007 recession, and potential for improvement is extremely limited for years to come.

The new congress will have only three options: The option to appropriate enough government funds to retrain 10 million Americans; the option to approve major infrastructure projects that would utilize similar education and skill sets to the ones used by the construction industry; or to accept that unemployment will continue to stay at these elevated levels for an elongated period. Each of these options will have serious ramifications to millions of families and affect the country's competitiveness in the process.

The second theme of the election is a smaller government and less spending. Georgia received $6.9 billion in federal stimulus funds so far. According to a report released by Georgia in early November, the American Recovery and Reinvestment Act in the third quarter alone provided the state government with $ 979.3 million used to fund 29,113 jobs. The teachers, college professors, police officers, and other public positions funded through the program are in jeopardy as the stimulus money dries up over the next two quarters. The immediate impact in Georgia will produce even higher unemployment and more foreclosures at a time when homelessness is already at record high, and families represent 41% of the homeless population nationwide.


The TARP program appropriated by former president George W Bush saved capitalism from itself, brought the financial system back to life, and made taxpayers a small profit. In the next two years, only, infrastructure spending will create suitable jobs for the majority of the unemployed. Moreover, federal support to the States will increase tax revenues and gradually bring down the deficit. It is our livelihood and kids' future. Is anybody listening?

Author's Bio: I am an Egyptian American born in Alexandria. I immigrated to the US in the late eighties, during this time lived in many places in US and Europe. I work as an IT manager and love it. I love to travel, it makes me feel young, and it awakes in me sense of adventure and curiosity. I love knowing people from different cultures; it never fails to amaze me how we all live in our little worlds that never meet. History is my second amazement, it always differ depending on who is winning, that leads me to my third hobby, politics is it history or human nature that is the culprit?

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