The Verdict is in on June’s Employment Report…and what to do about it

Thomas Kochan, Co-director, MIT Institute for Work and Employment Research

According to the World Commission on Environment and Development, a “sustainable” economy must meet the needs of the present while not compromising the ability of future generations to meet their needs.  By this standard, the American economy  is definitely unsustainable:  It is not creating enough jobs to meet the current or future population’s needs and the long term trend in job quality is destined to produce a declining standard of living for today and tomorrow’s workers.

 June’s dismal unemployment numbers are just the latest indicators.  The economy created only 18,000 new jobs (about 130,000 less than needed just to keep up with the growth in the labor force) and unemployment rose to 9.2%.  Moreover, hourly wages over the past year lagged increases in prices by  1.5%. 

These numbers, coming on the back of an equally bad report last month make it painfully obvious that the nation needs a new, aggressive, and comprehensive employment strategy, one that creates jobs directly and successfully engages business and labor in efforts to build a sustainable recovery and economic future.

This is why over 150 researchers from 30 universities joined together this year to create a new Employment Policy Research Network (  Our goal is to elevate analysis and encourage evidenced-based action on these issues.  Research papers on our website ( document in detail the depth and breadth of unemployment and its disastrous consequences for families and communities ( and the growing gap between wage and productivity growth that has been growing since the 1980s (   These could serve as fact-based starting points for those willing to work seriously on a comprehensive action plan.

No sensible option should be off the table.  Among the ideas that have been proposed and deserve consideration include:

  • Creation of a national infrastructure bank to fund the pent up demand for the infrastructure needed to support sustained economic growth
  • Jobs’ tax credits to encourage businesses to invest and expand
  • Expansion and extension (not cuts as some now are proposing) of unemployment insurance benefits to avoid further loss in consumer purchasing power.
  • Expanded, not contracted funds for state and local governments to invest in education so that teacher layoffs and/ or salary and benefit cuts do not offset or frustrate the wave of collaborative innovation now sweeping across America’s schools through Race to the Top and other incentive programs.
  • Direct public works job creation to put young graduates to work before their educational investments are lost for lack of job opportunities that use and further develop their acquired knowledge and skills.
  • Modernization and reform of labor and employment policies to transform outmoded 20th century labor management relations into 21st century practices that engage workers, drive innovation and productivity, continuously upgrade workforce skills, and share the gains generated with workforce.
  • Concrete actions to rebuild America’s manufacturing capabilities and incentives to locate production jobs in the U.S.

A sensible mix of these actions would start to rebuild the consumer purchasing power needed to sustain the recovery and begin the long process of restoring trust and confidence and a sense of common purpose in America.  Let’s get on with it.

(Source: Employment Policy Research Network)

Thomas A. Kochan is the George M. Bunker Professor at the MIT Sloan School of Management, Co-Director of the MIT Institute for Work and Employment Research, and co-founder of the Employment Policy Research Network.

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