Professors question effectiveness of Jobs Bill

The highly contested Jobs Bill that originated in the U.S. Senate and has bounced back and forth since its inception between the U.S. Senate and the House of Representatives might obtain a green light from the Senate this week. Although the bill aims to encourage companies to retain employees, its funding will add a burden to the already extensive budget deficit for 2010.

According to the U.S. Congressional Budget Office, the Federal Government's deficit is running at $655 billions for the first five months of the current fiscal year.

"The centerpiece of the jobs measure is a $13 billion program to give companies a break from paying Social Security taxes for the remainder of the year on new employees," according to the Washington Post online.

Professor Edward Malca, of the economics and finance department at Baruch, explained what the bill intends to solve and discusses its apparent ineffectiveness.

"The $15 billion so-called jobs bill is really a mixture of jobs, highway funds, bond sales and equipment tax write-off," Malca said. "The job component gives and employer payroll tax exemption for new employees who have been out of work for over 60 days.  This will not significantly reduce unemployment because the small size of the program and the relatively small tax incentive."

When asked about the effect of the bill on the U.S. budget deficit, Professor Michael Carew of the department of finance and economics said that the size of past acts passed by the Senate and signed into law makes this bill seem "paltry."

The professor believes the bill's effect would not be substantial on the economy.

"With over 17 million Americans seeking work, and each billion-dollar capable of creating a year's work for maybe 20,000 workers, at most you might expect 300,000 jobs," said Carew. "Under the best circumstances the bill would reduce unemployment by less than 2 percent."

The unemployment rate stayed steady for February at 9.7 percent.

The benefits of this bill will not directly affect students who came into the workforce earlier this year. However, if passed, the bill might, in combination with another $150 billion initiative being contested in the Senate, positively affect students' opportunities to find jobs in the near future.