Economy: Jobless Rate Hits a High

The Report

Reuters reports a grim report from the Department of Labor: job losses for October 2008 totaled 240,000. This number puts the unemployment rate at 6.5%, its highest rate since 1994. The unemployment rate has jumped over the past three months as Wall Street firms have reeled from the financial crisis. The the last three months (August, September, and October), an astronomical 651,000 jobs have been lost.

Photo courtesy of Reuters

Implications

The report doesn't look good for working and middle class Americans who are already struggling with mortgages, retirement plans, and a shortage of available credit from banks. Every unemployed individual means a consumer that doesn't have money to spend or to pay back credit loans with. So even if you've got a safe, steady job, you'll feel the ripple effects of soaring unemployment.

So what can we do to get people back to work? As I wrote last night, referencing a Paul Krugman article, Barack Obama has an opportunity to test some progressive solutions to our economic recession. During the Great Depression, President Roosevelt addressed high unemployment through government creation of public works jobs in new organizations like the Tennessee Valley Authority. Of course, World War II also created a lot of military and civilian jobs. President-elect Obama should consider a program that includes public works projects  that would hire unemployed Americans.

One perfect opportunity exists in the area of transportation infrastructure, and by this I don't mean highways (although there might be some job creation opportunities in roadwork). Instead, I mean improving or remaking our national rail system. With the price of fuel still high and the cost of greenhouse gases from cars on global warming, national mass transit is a worthy goal. Amtrak has the potential to be an efficient substitute for cross-country driving. However, upgrades to the track are necessary. Amtrak currently shares a lot of track with private freight. When these freight trains are routed in front of Amtrak Superliners, travellers experience massive delays. A few summers ago I took Amtrak from Boston to Chicago. The train stopped in Buffalo and we had to get off the train in order for several freight trains to use the tracks. This cause us hours of delay. From what I understand, this is not an uncommon experience for Amtrak passengers travelling long distances. Adding track designated specifically for Amtrak trains would help alleviate delays. This sort of project would create jobs across the whole continental U.S.

Another option would be to start from scratch to build a high-speed rail system. This would be a much costlier option but could very well be worth it in the number of jobs created and increase in transportation infrastructure.  High-speed trains can exceed 200 MPH, making them excellent options for regional trips. This would require the U.S. to lay new track across the country. Or, we could build a high-speed rail system for a specific region (i.e. the Midwest, the Northeast Corridor, etc.) in order to create jobs in that region.

The possibilities are endless, but the fact is that public works projects benefit both those looking for employment and the public in general.