Unpacking The Jobs Plan

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In Thursday's much-anticipated jobs speech, President Barack Obama called for new infrastructure programs, payroll tax credits, and decreased government regulation to create new jobs, as well as extended benefits for the unemployed.

Associated Press Senior Hang Pham reads a brochure while waiting to talk to her career counselor at UC Irvine in Irvine, Calif.

Here's a look at how the jobs plan, if enacted, would directly affect different groups of workers as well as the unemployed:

The Unemployed

Under Mr. Obama's plan, the unemployed would see several additional programs to help get them back to work.

The plan would renew the 99-week unemployment benefit limit, which would expire at the end of this year if not for Congressional approval.

States would be required to start what White House officials call "rigorous reemployment services" to help the long-term unemployed--those looking for work for 27 weeks or longer--find jobs. Modeled on current jobs programs offered in Georgia and North Carolina, employers could potentially "try out" and train unemployed workers for free while the workers are paid by unemployment insurance funds. Some economists have noted that the success of such programs hasn't been proven by research, and labor advocates have expressed concern that it could lead companies to exploit desperate job-seekers.

Meanwhile, employers would get a tax credit of up to $4,000 to hire people who have been out of work for more than six months, a move that would help level the playing field for the long-term jobless, said Rutgers economist Bill Rodgers.

"The reality for these workers is that they have a weaker job network and skills that are beginning to atrophy," Mr. Rodgers said. "[The credit] helps offset that perceived cost for employers."

The actual impact that the president's plan would have on the unemployment rate will depend largely on how confident Americans and companies are in its effectiveness, Mr. Rodgers said.

-- Joe Light

Construction Workers

As with the 2009 stimulus package, much of the proposed policy is directed toward the construction industry and the more than 1 million unemployed construction workers in America.

The plan would put $30 billion into renovations at schools and community colleges, $50 billion into the modernization of roads, airports, waterways and railroads, $15 billion into "Project Rebuild," a program that refurbishes vacant and foreclosed homes and $10 billion into financing for a national infrastructure bank that would use both public and private investment to finance infrastructure projects. Mr. Obama said these initiatives would create "hundreds of thousands" of jobs.

But some question the long-term job growth in the construction industry.

"We added a lot of construction workers during the housing boom, but we will not go back to building over two million new homes a year like we did in the mid-2000s," said Adolfo Laurenti, deputy chief economist and managing director at Chicago-based financial services firm Mesirow Financial. "For the construction industry, the risk in the long-term is that this temporary solution will prove just that: temporary."

-- Damian Ghigliotty

Small Businesses

Mr. Obama's plan would cut payroll taxes in half for up to the first $5 million in wages businesses pay and offer a $4,000 tax credit to companies that hire long-term unemployed. It would also extend the so-called "100% expensing," which allows firms to take an immediate 100% tax deduction on capital investments, an incentive that would otherwise expire at the end of the year.

Companies that are on the fence about making a new hire might decide to do so with the tax incentives, said Bob Litan, vice president for research and policy at the Kauffman Foundation, an entrepreneurship advocacy organization.

Still, because the proposed tax breaks are temporary, their effectiveness in creating hiring will be blunted, said Bill Rys, tax counsel at the National Federation of Independent Business, a small-business association.

"A lot of the concerns that we're hearing from our members are long-term issues," not temporary problems, he said, citing a July study the group conducted in which 51% of small-business owners said lack of demand as their No. 1 problem.

-- Jeremy Greenfield

Temporary Workers

When the economy is stimulated temporary workers are often the first to get hired.

Indeed, the temporary nature of many of the president's policies may encourage firms to use more temporary workers said Jeff Silber, a staffing-industry analyst at BMO Capital Markets.

"You're going to have a situation in which companies are a little bit reluctant to hire full-time employees," and will instead hire workers on a temporary basis, said Tony Cherbak, president and chief operating officer of Resources Global Professionals, a publicly traded staffing firm.

-- Jeremy Greenfield

Technology Workers

Mr. Obama didn't specifically mention high-tech workers in his speech but the proposed federal try-out plan (allowing unemployed workers to get hands-on training at companies while still collecting unemployment insurance), similar to those already in place in Georgia and North Carolina, could help give unemployed workers the skills to succeed in technology jobs.

However, it's very difficult to persuade companies to participate in such programs, even with subsidies. "Companies are not in the business of training workers," said Anthony P. Carnevale, director of the Center on Education and the Workforce at Georgetown University. "They're in the business of making and selling products or services."

The president also referenced a commitment made by business leaders at the end of August to help train 10,000 additional American engineers a year.

Eric Berridge, chief executive officer of the IT recruiting firm Bluewolf, said that he was disappointed that the president didn't offer more guidance on how to bridge the so-called "skills gap."

"What was lacking were specifics around training people in the skill sets that are in huge demand in the economy right now," Mr. Berridge said.

-- Joseph Walker

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