Reservoir Hill Improvement Council


Working Families Need a Real Economic Stimulus

By Richard Gwynallen

15 April 2008

The checks are soon to be in the mail.  In Reservoir Hill and Penn North there are about 450 households with at least one child and with a household income of less than $75,000. Each of those households could be receiving at least $900 each. That means that at least $405,000 is coming into the community.  It’s supposed to stimulate the economy, create a more robust economy in which we will all thrive.  What’s really going to happen? 

Higher income families may well just save the money.  Lower income families may pay off gas and electric bills or other debts, put it toward their rent or mortgage, or eat better for awhile. Middle income families may just treat themselves to more spending like the Administration wants.

So, what if they do spend more?  What is consuming more going to do to stimulate the economy? Most of that spending will go to merchants. So, merchants will benefit. The merchants may use it to pay down loans. So, the banks benefit; a sort of “trickle up” economics as a colleague called it. 

Once spent, does the money create more jobs with better wages?  For the majority of working people, that would be an economic stimulus program. But there’s no guarantee that jobs and income will derive from the economic stimulus package.

So, why aren’t we seeing a jobs program?  The need for work to be done is not the problem. With the unemployment rate at 5.1% (not including the under-employed and the working poor) there are plenty of people who want to work, and there’s a lifetime of conditions that require work. Hurricanes, tornadoes, wildfires and floods cause damage that is left unattended. Roads and bridges need repair.  Watersheds need restoration from the impacts of industry and development. Waterways need cleaning. The U.S. faces a deficit of investment in vital human and physical resources.  The New Labor Forum report, “Decent Work and Public Investment” states that 154,000 bridges are structurally deficient or obsolete, and 2,600 dams are considered unsafe.

First and foremost, we have to put aside the prejudice that business interests have managed to build up against government initiated jobs programs.

An expanded federal investment in improving necessary human and ecological infrastructure, coupled with funding for research and job development in conservation and renewable energy, and with funding for education that prepare workers for such an economy could provide productive living wage work, and increase worker spending power and tax revenues.

Working Families Need a Real Economic Stimulus 15 April 2008