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Responding to such criticism, Senate Republicans introduced a White House-endorsed bill last week to create new jobs through a 50 increase in the federal gasoline tax. The added tax would generate, over the next five years, revenues of $27.5 billion for repairing highways, bridges and urban mass-transit systems, thus spawning an estimated 320,000 jobs. On top of that plan, House Democrats began drafting a $5 billion proposal for putting people to work renovating veterans' hospitals, low-income housing projects and other public facilities.
Skeptical economists argue that neither scheme will have much immediate impact on unemployment. They point out that public works projects launched during past recessions took so long to gear up that they had no real effect until the economy was already well into recovery. Moreover, contends Bruce Bartlett, deputy director of the Congressional Joint Economic Committee, up to 75% of the construction jobs will go to skilled workers and therefore will hardly make a dent in structural unemployment.
One of President Reagan's primary prescriptions for hard-core joblessness is his enterprise-zone bill, which would authorize tax breaks for businesses that create new jobs in depressed urban and rural areas. Urging Congress to pass the legislation during its lameduck session, the President said last week that the law "would provide a new lifeline to people who live in our inner cities."
Another idea under consideration at the White House is to make the minimum wage lower for teen-agers than it is for older workers. The wage floor is now set at $3.35 per hour, and many economists are convinced that this level discourages companies from hiring and training young, inexperienced job seekers. Says Peter Aranson, an economics professor at Emory University: "The one piece of legislation that has done the most to hold down employment among young blacks is the minimum wage law." Any Administration initiative to establish a two-tier minimum wage, however, would be anathema to organized labor and face rough going in Congress.
Labor specialists doubt that tinkering with the tax laws and the minimum wage will be enough to solve the dilemma of structural unemployment. New training programs will be needed, they say, to help inexperienced and displaced workers learn marketable skills. So far efforts along these Lines by the Federal Government have been woefully inadequate and mismanaged. The programs created by the Comprehensive Employment and Training Act of 1973 to help the disadvantaged have been costly ($55 billion spent) and riddled with waste. Now Congress has replaced CETA with a Government-business training program run by state Governors with the help of private industry councils in cities and towns across the U.S. In these organizations, local business executives, aided by labor leaders and city officials, will supervise training and job placement for the unemployed.
The Government has no comprehensive strategy for retraining workers displaced by foreign competition or changing technology.
Instead, an irrational patchwork of 23 programs has grown up over the past two decades to help such diverse groups as unemployed railroad workers or lumberjacks in the redwood forests of California.