The economy, particularly the labor market, is gradually gaining strength. Job creation is up, and the unemployment rate keeps falling. But American families need more than a few good months to overcome the massive economic pain wrought by years of high unemployment. Incomes have dropped, poverty is up, long-term unemployment stays high as does the unemployment rate, households suffer from crushing debt burdens, and massive wealth losses linger. The economy and the labor market will have to grow much faster for much longer to restore economic security for America’s middle class.
Growth and job creation come from the private sector, but the current economic recovery would have been weaker and happened later had policymakers not taken steps in the past few years to invest in infrastructure measures and help the most vulnerable.
Smart economic policy can continue to strengthen the economic recovery and help accelerate private-sector job creation. Policy can boost the economy by increasing infrastructure spending and extending key middle-class tax cuts such as the temporary payroll tax cuts for an additional year. And policymakers can lend a helping hand to millions of unemployed workers who cannot find a job and need extended unemployment insurance benefits until the economy and the labor market improve further.
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