January 31, 2013

Campus Politicos Hope Economy Will Rebound In Obama’s Second Term

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As President Barack Obama enters his second term, Cornell faculty and students said the economy and unemployment rates must stay at the forefront of policymakers’ minds.

The nation’s unemployment rate remains a critical issue due to other difficulties it tends to create, according to Jesscia Reif ’14, chair of the Cornell Republicans.

“There are a lot of economic issues that need to be addressed,” she said. “The unemployment rate is still the biggest issue, especially among young people. [Unemployment] causes a whole set of problems: People are unable to pay student loans, and it decreases job opportunities.”

The unemployment crisis was preceded by a series of economic shifts that hurt job growth, according to Prof. Sharon Poczter, applied economics and management.

“In terms of jobs that we’ve had in the past 20 to 30 years, there is evidence that employment has undergone a paradigm shift,” she said.  “Even before the onslaught of the Great Recession, the labor market was in serious trouble. Job growth between 2000 and 2007 was only half what it had been in the preceding three decades.”

Jessie Palmer ’13, president of the Cornell Democrats, said the national debt ceiling is the most significant national issue in the wake of the recent fiscal cliff crisis which — without the passage of the American Taxpayer Relief Act of 2012 — could have led to a sharp decline in the budget deficit, as well as a mild recession increased unemployment.

“We need heightened bipartisan behavior. Congress needs to figure out where we are spending, what do we need to do to save money, where we actually need to spend money,” she said. “Ultimately, we need to stop average Americans from feeling the brunt of [the debt ceiling].”

The average male high school graduate saw the largest drop in earnings over the last 40 years, according to Poczter.

“Employment grew in high-education, high-wage professional, technical and managerial occupations and in low-education, low-wage food service, personal care and protective-service occupations [while] employment fell in middle-skill, white-collar and blue-collar occupations,” she said. “The drop in middle-income manufacturing jobs was especially precipitous.”

The middle-income drop is tied to an increase in jobs that require post-secondary education, according to Poczter.

“Good jobs that do not require at least some post-secondary education or specialized training were becoming increasingly scarce, driving workers without the requisite skills into lower-wage jobs or out of the labor force altogether,” she said.

To combat unemployment, Poczter said policymakers should invest in U.S. education.

“Our education needs to emulate the evolution of our competitiveness,” she said.  “We need to initiate more sector-wide collaborations to build consensus and share the costs of improving education.”

Fiscal motivations are critical to lowering the number of people who are unemployed, Reif said.

“[To combat unemployment rates], taxes should be cut, specifically tax cuts that favor employers who are hiring,” she said. “We need to give financial incentives for employers to hire.”

The solution to the economic crisis will require bipartisan cooperation among from policymakers, according to Palmer.

“Both sides need to give and take a little,” she said. “Politicians have said in the the past that it’s not going to be fun, it’s not going to be easy, but [to solve this issue], they need to compromise.”

Although the bid for the presidency has ended, the battle against unemployment should continue, Poczter said.

“Unemployment as a major issue should not be neglected simply because the election is over,” she said.

Original Author: Emma Jesch