We are now seeing real evidence of the need for more working adults, if the US economy is to continue to grow. The Labor Department’s Job Openings and Labor Turnover Survey, or JOLTS report, said April job openings are nearly 1 million ahead of hirings in a widening spread pointing to skill scarcity in the labor market.
“Job openings totaled 6.044 million in April which is well outside Econoday’s high estimate for 5.765 million and up from a revised 5.785 million in the prior month. Hirings totaled 5.051 million which is well down from March’s 5.304 million with the spread between the two nearly 150,000 higher at 993,000,” said Econoday.
What to do about it, since infrastructure upgrades are needed to boost economic growth? Private industry has not increased capital expenditures on anything for more than one year, choosing to either hoard their increased profits, or invest overseas. Both state and federal governments have to increase their public works spending as well, which is not yet happening because states have to run on balanced budgets.
And many chose to cut taxes like Kansas in the belief that trickle-down economics was the conservatives’ answer to adversity; which has instead prolonged the pain.
The ultra-conservative Tea Party is in control of Congress and many states, in other words, and they have focused on tax cuts, such as those incorporated in the so-called repeal and replace Obamacare House bill that was passed without updating its CBO scoring, because up to 24 million could lose health coverage, while coverage costs would skyrocket.
The Center For Budget Policies Priorities (CBPP), a progressive think tank, has been asking states to boost their infrastructure spending for years:
“But rather than identifying and making the infrastructure investments that provide the foundation for a strong economy, many states are cutting taxes and offering corporate subsidies in a misguided approach to boosting economic growth. Tax cuts will spur little to no economic growth and take money away from schools, universities, and other public investments essential to producing the talented workforce that businesses need.”
As I’ve reported in past columns, the American Society of Civil Engineers (ASCE) in its 2017 report card on the condition of America’s infrastructure gave U.S. infrastructure a D+ or “poor” rating. The engineers estimated the cost of bringing America’s infrastructure to a state of good repair (a grade of B) by 2020 at $4.59 trillion, of which only about 55 percent has been committed.
Improving roads and bridges alone would require almost $850 billion more than states, localities, and the federal government have allocated. Schools need another $270 billion beyond what’s been invested.
CBS News reports that the Trump plan specifies only $200 billion in new federal spending even as the administration’s budget includes “enormous cuts to public investment,” according to the liberal Economic Policy Institute. The administration also did not specify just where the remaining $800 billion would come from and how the spending increases would jibe with the huge cuts in infrastructure spending envisioned in its proposed budget.
The question now is not only how will these projects be financed, but where will we find the workforce?
Harlan Green © 2017
Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen