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Economist believes stimulus package was too small


JANUARY 2010, Allentown/Bethlehem/Easton edition of The Union News

Economist believes stimulus package was too small


REGION, December 9th- In the third quarter of 2009, Pennsylvania underemployment rate, which includes the unemployed, workers unable to find full-time work, and other jobless individuals, stood at 14.2 percent, meaning more than 900,000 people in the Commonwealth are either unemployed or underemployed.

In the first quarter of this year Pennsylvania was losing more than 25,000 jobs a month and in the last three months the Commonwealth has been losing about 4,000 jobs a month.

According to the United States Department of Labor (DOL) the national job market showed some signs of improvement in November as total nonfarm employment fell to 11,000 jobs for the month and the unemployment rate dropped to 10 percent.

Estimates released by the Congressional Budget Office (CBO) suggest the improvement in the economy is due in large part to the American Recovery and Reinvestment Act (ARRAct). The CBO suggest there were between 25,000 and 65,000 more jobs in the Commonwealth of Pennsylvania in the third quarter than there would have been in the absence of the economic recovery package.

However, according to Mark Price, Ph.D., and Labor Economist for the Keystone Research Center in Harrisburg, the economic stimulus was too small to counter the most severe collapse in the private sector in more than a generation.

“Although we’d be in much worse shape without the recovery package, the staggering number of people unable to find enough work makes it clear that the stimulus was too small,” said Mr. Price.

“With all signs pointing to a prolonged period of joblessness for hundreds of thousands of Pennsylvanians, futher efforts to put people back to work are desperately needed,” said Stephen Herzenberg, Ph.D., and Economist and Executive Director of the Keystone Research Center.

“Failure to spur further job creation threatens to drive increasing numbers of families into poverty, a result which has been shown to hurt the educational achievement of young children. Joblessness also threatens to lead companies to pare back their investments in training and research and development,” added Mr. Herzenberg.

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