With unemployment reaching 10.2% and likely to rise over the coming year, the Obama administration is getting desperate to show that it can reverse the rising unemployment and the President's falling poll numbers.
It’s one of the oldest tricks in the presidential playbook: when you want to focus attention on an issue, hold a meeting and call it a “summit.”
President Barack Obama’s already done a “Fiscal Responsibility Summit,” a “Health Care Summit,” an “H1N1 Flu Preparedness Summit,” and even a “Distracted Driving Summit.”
Next up: a “Jobs Summit” Thursday, and if Obama thought fighting the flu or getting health reform done was tough, wait until he faces the hard truth that presidents ultimately face when they need an economic quick-fix.
There isn’t one.
The president needs to use this historic opportunity to break this impasse and launch an era of productive and innovative labor management relations needed to foster and sustain the new pact.
To do so, the president should announce his intention to work for speedy passage of a reframed and expanded Employee Free Choice Act, a labor law reform bill currently stalled in Congress.
The likely consequence of EFCA will be to retard the formation of small businesses, as fledgling entrepreneurs will reassess their prospects of success to take into account the danger of derailment at an early stage in the process. In the long‐term the EFCA will reduce the rate of firm formation, and thus deprive the economy of a central driver of new job creation and technology growth.
And for larger firms?
Faced with these constraints, a firm’s ability to shift and meet the rising competition from new firms could easily result in the loss of jobs from the failure of certain business lines, or the conscious redeployment by management of assets and new investment to locations that have lower costs and greater flexibility –traits most often associated with nonunion operations. The decision to send more activities offshore is also a distinct likelihood.
More relevant to Thursday's "jobs summit" is President Obama's own Larry Summers. Prior to his joining the Obama administration, Mr. Summers seemed to get it.
Just a few years ago, Mr. Obama's current Director of the National Economic Council wrote that unionization is a cause of long term unemployment.
Another cause of long-term unemployment is unionization. High union wages that exceed the competitive market rate are likely to cause job losses in the unionized sector of the economy. Also, those who lose high-wage union jobs are often reluctant to accept alternative low-wage employment....
There is no question that some long-term unemployment is caused by government intervention and unions that interfere with the supply of labor....