Earlier today new legislation designed to nudge employers into making new hires overwhelmingly passed a Senate vote and heads now to the House for final approval. The $15 billion bill is built around $13 billion that would go toward allowing businesses to skip paying a 6.2% Social Security payroll tax for new employees who’ve been out of work for 60 days or more.
The Congressional Budget Office–run, of course, by this hot-for-Washington fellow–has estimated that the new bill would result in some 234,000 jobs, although part of that figure would be made up of people who’s jobs were not eliminated as a result of the legislation. (Other estimates put the figure closer to 1.3 million jobs.)
If we are working with the 234,000 number, then there are obvious shortcomings with the bill. Because on the one hand, this is great news–that’s 234,000 more people not out of work! But on the other hand, 234,000 is a small percentage of the nearly 8.5 million Americans who have lost their jobs since the recession began. And this also means that the government is spending just north of $640,000 per job saved or created with the new bill. (UPDATE/ CORRECTION: Make that $64,000 per job! Much better. Thanks Lance Huan!) Still, clearly something bold must be done. Yesterday reports showed that consumer confidence took a big hit this month, due in part to the lingering uncertainty about the job market. That dip had a negative effect on the markets–and on our mood, generally–which will not help the unemployment situation. See how sucky that is? Already today stocks are revving up on news of the Senate vote.
And so. Yes, the jobs bill may be flawed but what bill isn’t in these dark, discordant days in D.C. (how’s that for alliteration!)? And if the total number of jobs saved or created is closer to 1.3 million, then it is certainly a more effective and cost-effective measure. The health care bill is flawed but many people would argue that it is better to do something to help than do nothing at all. Those people have a point.