Allegretto warns of economic catastrophe without massive public works program

August 6, 2010

Amid talk about extending the Bush tax cuts and calls for super belt-tightening by governments at all levels, there's not much discussion of a massive public works bill to fix crumbling infrastructure and put millions of workers in California and across the nation back to work. But in a policy brief released Friday, UC Berkeley Labor Center economist Sylvia Allegretto says such a project should be an urgent priority. The legacy of our Great Recession is at a crossroads, she warns.

Allegretto says the jobs picture is severe in the United States — and catastrophic in California. A lack of private sector hiring, coupled with public sector cuts, may be more than the economy can bear, she says. The Congressional Budget Office estimates that it will be late 2015 before the United States creates enough jobs to recoup those lost and to provide needed growth, but the Center for Economic and Policy Research says such a recovery could take until 2021.

California's future looks anything but golden. Allegretto notes the state's current 13.9 million jobs equals the number of jobs in April 1999 — back when the labor force was much smaller and unemployment was just 5.4 percent. Allegretto's brief explores "bang for the buck" budget choices and documents unemployment numbers and job growth since the onset of the recession. She also looks at the effectiveness of some of California's options for dealing with its budget crisis.

Read the full brief: The Severe Crisis of Jobs in the United States and California (PDF)