Turn on any cable news station, flip open any newspaper, or watch any campaign ad these days and chances are you’ll see or watch, or read about the staggering unemployment rate in this country. On October 5th, 2012, the Labor Department reported that the unemployment rate in September in the United States dropped from 8.1 percent to 7.8 percent. While this is some much-needed good news for the American economy, the overall outlook is still relatively bleak. More Americans than ever before continue to use food stamps, many Americans remain in poverty, and many people have only been able to find part-time work, or have stopped looking for employment all together. So, what to do?
Luckily for us, Uncle Sam holds a presidential election every four years, so we, the college-going electorate, are treated to two extensive plans to whip our job market into shape. If you’re one of the many who tuned into the first presidential debate, you’re well aware that President Barack Obama and former governor of Massachusetts Mitt Romney have very different ideas about how to get Americans working again. Their plans can get confusing, and for those not fluent in Mankiw-speak we’ve broken down the specifics below!
Overview: With the United States losing over 800,000 jobs per month when President Obama took office in January 2009, he had a lot on his presidential plate to start his first term as our nation’s leader. While no one is denying that our country was in a deep recession at the time, one of the main issues of this election is if and how he has improved the situation.
The American Recovery and Reinvestment Act
Shortly after taking office, President Obama signed into law the American Recovery and Reinvestment Act, better known as the Recovery Act. The Recovery Act cut taxes for small businesses, the middle class, and
saved several thousands of government jobs. The Recovery Act also invested money in clean energy, education, and infrastructure, all areas that President Obama believes hold the key to ensuring a stable and competitive job market in the United States.
American Jobs Act
In September of 2012, President Obama put forth the American Jobs Act. The American Jobs Act contains two main parts: payroll tax relief and an extension of unemployment insurance. The plan is expected to create one million more jobs for Americans.
Consumer Financial Protection Bureau
In an effort to reform detrimental Wall Street practices, President Obama created the Consumer Financial Protection Bureau. This bureau is meant to guard Americans against widespread and fraudulent practices by credit card lenders and mortgage bankers.
Going Forward
The president has maintained that while his reforms have helped to boost the economy, there is still more work that needs to be done. Going forward, President Obama plans to invest in and promote innovation, give companies incentives to keep jobs in the United States rather than shipping them overseas, improve public schools and community colleges to provide workers with the skills they’ll need in the workforce, and supporting small businesses to create more job opportunities.
Collegiette View: “What people don’t understand, is that compared to where the economy and unemployment were four years ago, President Obama has done an incredible job of leading this country out of a recession. It took longer than four years for the economy to become as bad as it is, and it’s going to take longer than four years to fix it, but I believe President Obama’s plan is the smarter choice. – Morgan, University of Chicago ’13
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Mitt Romney’s Plan
It’s no secret that former Governor Mitt Romney does not approve of the way President Obama has handled the economy for the past four years. Romney attributes the high unemployment rates and the struggling economy on bureaucracy, excessive regulation, and intrusive government, what he calls, “Obamanomics.” Romney has his own distinct plan for getting America permanently out of this recession and back on the path to prosperity. Romney’s administration will mainly focus on reforms in many areas, including taxes, regulation, trade, energy, labor, human capital, and spending.
Taxes
Under a Romney administration, individual marginal tax rates would be cut by 20 percent. Additionally, the corporate tax rate (which, at 35 percent is one of the highest in the world) would be reduced to 25 percent. These tax cuts, according to Romney, would enable corporations to improve U.S. wages, introduce incentives for entrepreneurship and job creation, and ultimately save money for Americans.
Regulation and Spending
If elected, Romney would eliminate many of the government programs he deems unnecessary, inconsistent, and burdensome on the economy, such as President Obama’s health care reform and Wall Street reform legislation. Furthermore, Romney has promised that under his administration, he will begin to cut down on federal spending, hoping to bring it down to below 20 percent of the gross domestic product by the end of his first term.
Human Capital and Labor
Romney believes that the way to propel our economy forward and ensure low levels of unemployment is to provide better training for workers from the private sector and from the states. Romney also plans to focus on attracting skilled and intelligent workers from across the country to work in the United States to promote more innovation in our country. Additionally, Romney will fight for free enterprise, free choice, and free speech on the part of businesses looking to hire and union membership and activity.
Collegiette View: “I trust Mitt Romney’s vision for this country, as he has worked in business for 25 years and understands what it takes to make money. His plan gives responsibility back to the American people over their economic future and encourages growth rather than red tape and restriction.” – Kendall, University of Virginia ’15
So, why should you care about all of this? As collegiettes, we’re just a hop, skip, and a few short years or less away from entering the workforce. And we don’t know about you, but we’d like four years of midterms, all-nighters, and the occasional group project to pay off. Now, more than ever, our vote can affect our chances of being able to find post-graduate employment, which can truly affect the rest of our lives. Before you go around checking any boxes next to someone’s name, be sure you understand how their plan for unemployment rates in this country will affect you and your future.
Let us know your thoughts about the candidates’ positions on jobs and unemployment in the comments!