Youth unemployment levels are even direr at 11.5 percent. The levels for communities of color are even higher, with Hispanic youth at 12.2 percent and African-American youth at a staggering 22.1 percent. Employment at this age is necessary to hone skills for future jobs, so losing opportunities can jeopardize future potential earnings.
Unfortunately, Washington remains focused on the debt rather than the more pressing jobs crisis. Part of the blame falls on the House Grand Old Party (GOP) members who refuse to pass any bill that will stimulate the economy. President Obama attempted to spur job creation last year by encouraging teacher rehiring and funding infrastructure projects. But this bill was killed upon its arrival in Congress. Another significant setback for job creation this year is the lapse of the payroll tax cut. For 2012, the rate was 4.2 percent for employees instead of 6.2 percent. This represents a tax hike on most working Americans, causing another blow to the recovery. J.P. Morgan estimates this will reduce disposable income by $125 billion and consequently downgrade the GDP growth forecast for the first quarter of 2013 to just one percent.
Even worse, though, is that 2013 does not look like a year Congress will bother to deal with the unemployment levels. Due to gerrymandering by Republican state legislatures in 2010, House Republican members are more likely to suffer defeat from more conservative primary challengers than Democrats in their districts. Hence, there is no incentive for the Republicans in the 113th Congress to compromise or accept the Democrats’ job proposals. As for solutions offered by Republicans and Democrats, both parties claim tax reform could help create jobs. But the adjustment of individual and corporate income tax will have much greater effects on long-term growth than the current jobs gap. This is simply because corporations and high earners (who would be most affected by tax reform) would not necessarily spend their increased income immediately and may save for when the economy is more prosperous.
More dangerously though, Republicans continue to advocate cuts to government programs which in turn will decrease jobs for government workers. At a time when unemployment is already high, this would be a poor move.
Instead of focusing on the deficit, Democrats must shift the national conversation back to jobs. In the next battle over the debt ceiling, they should demand recovery programs and targeted government spending in concession for entitlement reform later. The jobs deficit now could lay waste to a generation of workers bringing much greater harm than any future debt. Congress must act quickly to prevent this.
