Looking at the national economic statistics, you might be able to persuade yourself that the recession is over. But observing local communities - neighborhoods of foreclosed homes, school districts about to lose their teachers, and commercial strips where the bus route just got cut - reveals much more persistent economic pain, and the threat that, with public investment dwindling, things could once again take a turn for the worse.
Yesterday, articles in the New York Times reported on the struggle of cities across the country to cope with plunging revenue for education and for transit networks. As many as 300,000 public school employees around the nation could lose their jobs to state funding cuts, according to Secretary of Education Arne Duncan. Charlotte, North Carolina plans to cut 600 of the district's 9,400 teachers; Los Angeles may lay off 5,200 school employees. Few urban districts have been spared.
Meanwhile, 84% of the nation's public transit systems have already cut service or raised fares or plan to do so. In New York City, two subway lines and 34 bus routes are slated to disappear by the end of June, while 600,000 students will lose access to free or discounted transportation to school. In Atlanta, buses and trains face a 30% cut in service. In more than 110 cities, public transit routes that residents rely on to get to work, do basic shopping, or take their children to school are threatened.
On the political right, the same critics who insist that there is no alternative to mass long-term unemployment also assert that declining investment in education and transportation represents "the new normal." A Bush Administration official warns that "districts need to learn to live with less." In other words, we'd better get used to having less educated children and worse transportation.
It doesn't take much to see that this is a recipe for future economic disaster.
Efficient transportation and quality education are cornerstones of America's global economic competitiveness. In the long run, downgrading these investments undermines the country's economic foundation. But it may push us back into economic decline more quickly than that. The Times quotes former Atlanta mayor Sam Massell: "We are just crawling out of a recession, but we will be knocked back into another one if the salespersons are not behind the store counters, if the restaurant workers are not in the kitchens, if the office staff are not behind their desks." Putting thousands of school personnel and transit workers out of a job both raises unemployment and undercuts critical public services.
Yet the fact that many cities are just now contemplating severe cuts is actually a victory for public policy. The American Recovery and Reinvestment Act saved 284,000 education jobs, according to the Center on Budget and Policy Priorities, and funded mass transit improvements and expansions nationwide. Policy worked: the problem is that the money ran out before the economic crisis ran its course. We need additional federal investment to meet the continuing need. As I've argued before, the Local Jobs for America Act is a strong alternative to a new normal of plummeting public investments. The bill would create or save a million jobs by providing local governments with direct funding to hire or retain teachers, firefighters, bus drivers, police officers, and other critical community workers. Additional funding for mass transit operating costs would also be a worthwhile jobs investment.
The big objection, of course, is cost. The Local Jobs for America Act invests $37.5 billion to save jobs and preserve services in local communities. Yet the price tag shouldn't be an insurmountable obstacle. As Ross Eisenbray of the Economic Policy Institute points out "the costs of inaction to our future prosperity are far greater than the cost of this bill. The best first step toward reducing the deficit is to get people back to work, since high deficits will be with us as long as high unemployment is." Can we afford not to?