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Paul Giorgio: It Was a Good Week for the US Economy

Wednesday, May 07, 2014

 

The economy is turning around despite Republican attempts to stymie an economic recovery, believes Paul Giorgo.

President Barack Obama and the US economy received very good news last week. The unemployment rate dropped to 6.3 percent, the lowest it's been in five years. We added 288,000 new jobs. This .4 drop put unemployment at its lowest level since Bush was in office. In addition, the Dow broke a new record closing at its highest point ever.

In the last 50 months 9.3 million private sector jobs have been created. Any lag in job growth can clearly be attributed to the decline of public sector employment. Governments on all levels have cut jobs and the federal government is at one of its lowest levels in a long time.

Baby boomers retiring at record numbers

These positive unemployment numbers come at a time when studies show that 10,000 baby boomers are retiring every day. So that the creation of almost 300,000 jobs is truly extraordinary.

The economy is turning around despite Republican attempts to stymie an economic recovery. The same week that the unemployment numbers were released the Republicans in the House under the leadership of Speaker John Boehner refused to extend unemployment benefits and voted against increasing the minimum wage.

Trickle up economics

It is clear that Republicans will do anything to halt any economic growth in this country. You may ask how extending unemployment hurts the economy. Those still unemployed will not have money to spend. Even the unemployed help to create jobs in the private sector. They still need to buy groceries, the still need to buy gasoline; they still need to pay phone or heating bills. All these create jobs in the private sector since someone has to sell them the items they need to buy and those people get a paycheck and spend their money so that other people service them and have jobs.

To turn a phrase, it is trickle up economics.

This brings us to the Republican rejection of a livable minimum federal wage. It is clear that in the new post Bush economy, many more people are struggling to make ends meet and you can't do it at $7 per hour or $280 a week.

Prior to the second George Bush, a minimum wage job was entry level and a step up. In the post Bush Great Recession a minimum wage job is a way of life for a great many Americans. What the Right doesn't realize or worse doesn't care about is how that not only affects the poor, but also affects the shrinking Middle Class.

Middle class is eroding

The Middle class used to be comprised of shop owners, middle managers in business and people in the public sector. Public sector jobs are scant nowadays and not many people are running out to start a small business.

This is the direct result of the new Republicanism that only cares about the few. When I was growing up, the Republican Party was the party of Main Street and small town America. Now it is the party of Wall Street and corporate America.

If America is truly to succeed, this must change. The Republicans must end their war on the working class.

 

Paul Giorgio is a longtime Democratic Party Activist who has worked on numerous campaigns. He was a Lead Advance Person for President Clinton & Vice President Gore. He was Deputy Director of Special Events for President Clinton’s first Inauguration. He has been elected a delegate to numerous Democratic National Conventions and recently served as one of President Obama’s representatives on the Platform Committee. In 2013 he was chosen as a Presidential Elector. He is the President of Pagio, Inc., publishers of Pulse Magazine, Vitality Magazine and Worcester Medicine.

 

Related Slideshow: 7 Strategies for Rhode Island Economic Development in 2014

What will it take to move the Rhode Island economy forward in 2014?  GoLocal talked with elected officials, candidates, and leaders for their economic development plans in the coming year. 

Below are key elements of the economic priorities for Governor Lincoln Chafee, Speaker of the House Gordon Fox, Senate President M. Teresa Paiva-Weed, House Minority Leader Brian Newberry, gubernatorial hopefuls General Treasurer Gina Raimondo and Ken Block, and RI Center for Freedom and Prosperity's Mike Stenhouse.  

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Governor Lincoln Chafee

"My goal is to have the state continue to focus on the fundamentals.  We will invest in education, workforce development and infrastructure , and provide aid to  cities and towns to lessen the burden on property taxpayers.  I’m confident that these investments and our focus on the basics will allow Rhode Island to exceed Moody’s predictions.”
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Speaker Gordon Fox

"Among the many pieces of legislation the House will address will be issues of higher education affordability, expanding apprenticeship opportunities, and offering help to our manufacturers.  We will also look closely at our tax structure to make sure we are competitive with our neighboring states, including the corporate tax and the estate tax, and I will carefully review the recommendations of the commission studying our sales tax.”

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Senate Pres. Paiva-Weed

Greg Pare, spokesperson for the Senate President, said that the Senate is planning to issue recommendations soon on workforce development initiatives to address the skills gap among Rhode Island job seekers.

"An example of a proposal anticipated in that report is the elimination of state’s Indirect Cost Recovery on the Job Development Fund, which is about $1.2 million this year. Those funds would be directed towards job training and skills development programs to provide immediate impact and help workers gain the skills necessary to succeed in today’s economy."

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Gen. Treasurer Raimondo

"To grow our economy, we need to make Rhode Island a leader in manufacturing again.  Great things can happen at the intersection of government, higher education, and the private sector.  Rhode Island is lucky to have thriving institutions in each of these three sectors, and we need to foster collaboration among them to find solutions to our challenges, and spark our economy.  

By promoting partnerships in high-growth areas, [Rhode Island Innovation Institute] will help grow our manufacturing base, and create new, high-quality jobs."  

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Ken Block

"First, we need to fix Rhode Island’s broken Unemployment Insurance program. The state’s Unemployment Insurance tax, paid by employers, is ranked worst in the country by the Tax Foundation. It is one of the factors that makes Rhode Island an uncompetitive place to do business. Also, it is inherently unfair that a large group of businesses are effectively subsidizing the payrolls of a small group of businesses who misuse the system. There is a simple change to state law that can fix this problem."

"Rhode Island’s temporary disability tax (TDI) is broken, and places an unnecessarily high tax burden on Rhode Islanders. This tax, paid for by employees, will be reduced by changing the way we manage the program. As Governor, I will substantially reduce the cost of purchasing this insurance by requiring that Rhode Island’s program adhere to national norms."

"To best encourage new job creation, I propose the following tax incentive: exempt from future capital gains taxes any new investments in Rhode Island-based businesses. This change would create a powerful incentive for investors who are deciding where to locate a new business, or where they relocate an existing one. This proposal has the potential change the economic playing field for Rhode Island."

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Minority Leader Newberry

“It would be overly ambitious to set being #1 as a goal right now, but we think 25, the middle of the pack, is a reasonable goal to set, one we think we should pursue, and one we can achieve,” said Newberry. "One of the initiatives is a requirement that every bill receive a fiscal evaluation before it can be heard by committee, better insuring that legislators know the real cost of the legislation they are acting on."

"Another proposal would exempt social security income from RI state income tax, making Rhode Island more tax-friendly for our seniors and keeping them here rather than migrating to more tax-friendly states."

“Strong action is way overdue here. Nearly 60% of Rhode Islanders now believe that the state is headed in the wrong direction. We think they’re right, and our central goal is to get it turned around."

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Mike Stenhouse

"As part of the Center's 2014 Prosperity Agenda we recommended that the state:
 
Repeal or rollback of the state’s regressive sales tax; or the requirement that families have no choice on what schools best educate their children; or punitive estate taxes that drive wealthy people to other states; or restrictions on out-of-state companies to sell health insurance in RI; or the minimum franchise tax, which stifles entrepreneurship; or corporate welfare, to level the playing field; or even renewable energy mandates that drive up costs for every family and business …"
 
 

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