On Tuesday, June 4th, the Roosevelt Institute's Rediscovering Government initiative will host A Bold Approach to the Jobs Emergency, a daylong conference exploring the roles of government, policy, and activism in addressing historic levels of unemployment and economic misery.

A lot is said about the jobs crisis in America, but not enough. We have a full-fledged jobs emergency and jobs are the nation’s number 1 problem. We at the Roosevelt Institute are holding a full-day jobs conference in Washington on Tuesday, June 4th to address a wide range of solutions to the economy’s alarming inability to create adequate jobs. The conference is sponsored by Bernard Schwartz, who has strongly encouraged this focus at Rediscovering Government and agrees that jobs are America’s major concern. We hope to shift the political agenda by examining what this emergency is, where it came from, and how we might solve it.

The unemployment rate is the first line of evidence of our emergency but not the most disturbing. At 7.5 percent, it has dropped roughly two and a half percent percentage points since its height, but remains far from full employment four years after the Great Recession ended. As many now know, if we include part-time workers who want full-time jobs and discouraged workers, the unemployment rate is roughly 14 percent. In another analysis, between 2007 and 2009, one out of six workers lost a job.

Of greatest concern is the related employment-to-population ratio, which measures the proportion of the country’s working-age population that is employed. It is down to 58 percent from 63 percent. This shows that the only reason the unemployment rate is as low as it is has been is because people are dropping out of the labor force. Recent surveys also show that sharp decline in re-employment rates.  

Then there is long-term unemployment, those out of work for six months or more, which is still millions of workers above its levels before the recession. New evidence shows that the long-term unemployed are “scarred.” They have measurably more difficulty getting new jobs than those out of work for a shorter time.

The emergency worsens because we not creating enough jobs to replace those lost, and the jobs being created are low wage or do not include retirement and healthcare benefits. Two of our conference participants, Annette Bernhardt and John Schmitt, have done original research on these issues. Their findings are alarming.

And what happens even when you get a new job? Researchers find that those displaced now experience sharp declines in wages over twenty years even when re-employed.

One reason I call this an emergency is that the two prior recessions and recoveries were also not creating jobs the way the U.S. once did. Job gains were late in coming in the economic recoveries after the recessions of 1990-1991 and 2001. Again, the jobs being created don’t match those that existed before. Today, the typical male earns less after inflation than he did in 1969. The typical household earns less than in 1999.

And what should worry us most is what is happening to the young.  Employment-to-population ratios for teenagers and young adults have collapsed. This is a social explosion waiting to happen. Early job experiences influence future job outcomes.

So what are we to do? Economists almost universally call for more college attendance. But is that remotely enough? Infrastructure investment has rarely been more appropriate, but will the U.S. spend enough? What about the minimum wage, job standards, local activism, job training? Has Wall Street’s emphasis on short-term corporate profits and the attraction of capital to trading profits made matters much worse? Is globalization the source of most of these troubles?

Finally, are we simply growing too slowly? Washington gives us austerity economics when we clearly need more stimulus. How does one move this mountain of misinformation and uninformed ideology? Full-throated fiscal stimulus might well be an answer that gets us closer to full employment.

We have always found economists who argue there is a structural employment problem, claiming that we don’t have the workers who qualify for the jobs. The evidence for this is thin at best. We will discuss this issue as well.

This jobs emergency now requires a full-court press. That is why we have seven different panels to address these questions and a host of possible solutions.

Some insist we should talk mostly about what is politically practical. If we limited ourselves to what Congress might do, we’d have little to talk about. We must change their priorities. Jobs must be number one, but the nation cannot seem to admit that to itself.

We need, as one of my colleagues puts it, a job-creating president and a job-creating Congress. Jobs should be on everyone’s lips. Many talk narrowly about how only business creates jobs, yet corporate profits are enormous and job creation lags. I hope that with this conference, we will begin to pave the way to a far broader job-creating political agenda for 2014 and 2016.

Roosevelt Institute Senior Fellow Jeff Madrick is the Director of the Roosevelt Institute’s Rediscovering Government initiative and author of Age of Greed.

Emergency light image via Shutterstock.com

Winning the war of ideas will be vital if we ever hope to implement such a successful program again.

Many thinking people are surprised that the lessons of the Great Depression have been so easily forgotten as the rich world struggles to get economies back on track after the worst recession since the 1930s. Keynes himself would have been surprised, because he thought the end of laissez-faire economics was well on its way even before the Great Depression. He wrote an essay in 1930 to that end called "The End of Laissez Faire," nicely summarized in a new book by Angus Burgin, The Great Persuasion, which predated his magnum opus, The General Theory, by six years.

But laissez-faire rose again with a vengeance under the articulate, if simplistic, preachings of Milton Friedman. It remains a guiding principle today partly because of the very allure of its simple core principle. For those of us who believe government is needed not merely to tame capitalism but to make it work, as well as to provide for a decent society that rewards all fairly and promotes social cohesion and optimism, we should remind ourselves how profoundly appealing laissez-faire is and what a battle we face. It is a set of elegant principles, while the correct critiques of it are ugly by comparison. Also, it was in the 1920s, and is today, the philosophy of the rich and powerful, not a small matter.

The rise, momentary fall in 2008, and rise again of laissez faire is therefore not really a stunning historical event. Fiscal stimulus, the main legacy of John Maynard Keynes, was derided when President Obama got an $800 billion stimulus passed. Then it was said by many that it didn’t either save or create new jobs. Meanwhile, Europe is overwhelmed by the disease of austerity economics. Only Germany stays above water based on exports made cheap by the low value of the euro -- something it would not be able to enjoy if it were independent of the Eurozone and had its own currency. Austerity economics has spread to the U.S. in the form of allegedly sensible budget balancing commissions that are not sensible at all. They helped foment the pressure to balance the budget as soon as possible, even with unemployment at nearly 8 percent.

It is not only fiscal stimulus that is derided. Programs to spur job growth have been limited to relatively modest infrastructure investments and tax cuts, especially payroll tax cuts. Less obvious, the push by mainstream economists to explain income inequality almost solely in terms of inadequate education is deeply misleading. Such an expalantion neglects the low minimu wage, persistently high unemployment rates, the failure to implement labor organization laws, and on.

There have been new programs. A modest investment in infrastructure and tax cuts. We do have a healthcare bill, which we should applaud on balance. But none of this compares to the adventure of the New Deal, and in particular the Works Progress Administration, whose anniversary we are celebrating today. The WPA went out and hired Americas to do jobs, including building infrastructure. By some estimates, some 8 million jobs were created.

We need a wide range of New Deal ideas made contemporary: higher minimum wages, living wages, aggressive public investment, green investments, and on. Government will be the generator of these jobs. Some, but very few, argue we need outright public employment programs, just like the WPA.

What made that happen then? A more severe recession than now, for one thing. A far bolder president, for another.   

But the ideology of laissez faire still had to be defeated. Laissez faire was not mentioned by Smith, Ricardo, or Mathus, Keynes wrote. “Even the idea is not present in any form in these authors,” he said in “The End of Laissez Faire.” He went on, the public had “come to regard the simplified hypothesis as health and the further complications as disease.”

Keynes blindly believed reason would prevail. The many over-simplifcations of laissez faire would become obvious, he optimistically thought. Sane criticism would prevail over simple ideology. For a while, he was right—a pretty long while. Arguably a version of Keynesian progressivism, which even included fixed exchange rates and plenty of social programs, especially in Europe, prevailed until the 1970s. Then it turned to over-simplifications and scapegoats, mainly driven by the painful inflationary economy of the 1970s.

Many are enamored of the idea that a revitalized right wing of effective think tanks, lobbying, and media disinformation ended progresssivm in the U.S. But that misreads history. Margaret Thatcher introduced stern anti-Keynesian policies well before the U.S. did at the start of the 1980s. Germany was anti-Keynesian throughout the 1970s. Ideas matter, and the acceptance of the idea of laissez faire regained the upper hand.

As we battle in memory of the marvelous WPA, we should keep in mind how intensely compelling laissez faire ideology is. It has captured, without their really noticing, the hearts and minds of most orthodox economists. As usual, it has the rich mostly on its side. If we recognize it is a tough, ongoing battle to defeat the simple version of it, we will fight it better. In the meantime, we can rejoice in how well we once did. That is the proof that we can win. American history can be repeated.

Roosevelt Institute Senior Fellow Jeff Madrick is the Director of the Roosevelt Institute’s Rediscovering Government initiative and author of Age of Greed.