Unemployment On The Rise

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Traditionally, Congress has tried to bring down unemployment with public works projects and public service jobs. But those familiar panaceas have been largely discredited, and even many Democrats are skeptical that old methods should be tried again. Says Massachusetts Senator Paul Tsongas: "We've been down that road before. It doesn't produce anything." The legislation being offered now to fight unemployment would stress job training for the private sector, not creating public jobs. Democrat Ted Kennedy, who last week called unemployment "the No. 1 issue now nationwide," has joined forces in the Senate with Republican Dan Quayle of Indiana to sponsor a $4 billion job-training program. In the House, California Democrat Gus Hawkins has proposed a $5 billion training program that would allow local officials to use some of the funds to create public service jobs. House Speaker Tip O'Neill has criticized Reagan for the growing unemployment lines, but so far has not suggested a plan of his own. An aide to the Speaker may inadvertently have best summed up the Democrats' plight. "Our alternative is that the President should advocate an alternative," said the spokesman. "That's our alternative."

Unemployment has historically been a good issue for Democrats, as inflation has been a good one for Republicans. Yet for all the White House worries about G.O.P. fortunes in the fall, it is not clear that Reagan will suffer much politically. Interviewing the jobless across the nation last week, TIME correspondents found relatively few who blamed the President for their plight. Rudy Barker, 62, was laid off in 1980 from his job at a lumber mill in Willamina, Ore., and he has not worked since then. "All this started before Reagan," he says. "It's been coming on for the last two or three Presidents." Says Samuel Ehrenhalt, Middle Atlantic regional commissioner for the Bureau of Labor Statistics: "A lot of people are just not ready to call it quits with the President."

In pushing its revolutionary program of budget and tax cuts to cure the nation of nagging economic ills, the Administration realized that some suffering was inevitable. Indeed, the White House anticipated a rise in unemployment during the early stages of the program; it was felt that a hike in joblessness was necessary to dampen wage demands and cool inflation, which Reagan regarded as the nation's chief economic problem. But Administration officials never expected that the rate would surge so high or inflict so much hardship.

When Reagan took office last January, the unemployment rate stood at 7.4% and the President's Council of Economic Advisers, headed by Murray Weidenbaum, predicted that the average annual rate for 1981 would be 7.8% and that it would rise to 8% for at least part of the year. Instead, the rate dipped to 7% in July, but then began climbing again as the economy started to buckle, partly because of high interest rates. The exorbitant cost of borrowing especially plagued the automobile and construction industries, which in turn affected their suppliers, such as steel, rubber and timber firms. With orders down, layoffs of workers spread.

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