What the American Jobs Act
Means for Citizens of Oklahoma

by Terry Tush 
(October 6, 2011 at 12:44 pm)

Mouhcine Guettabi

With the national unemployment rate at 9.1 percent, the American Jobs Act was introduced as a method of creating jobs. The question for many is how the bill is going to impact the state of Oklahoma and, more importantly, the lives of Oklahomans.

Mouhcine Guettabi, research economist with the Center for Applied Economic Research for OSU’s Spears School of Business, has studied extensively the American Jobs Act, and recently discussed the impact it may have on the economy.

“The White House has basically broken down how each state will be impacted by the American Jobs Act, and one of the things that the American Jobs Act tries to do is basically allocate money to the states in order to prevent layoffs,” Guettabi said. “There is $35 billion that’s being allocated to the states in order to prevent layoffs, and so Oklahoma should be getting somewhere close to $400 million in order to potentially save some 5,900 workers.

“While Oklahoma has done very well relative to the rest of the states in terms of unemployment (with the nation’s fifth lowest unemployment rate at 5.6 percent, according to figures released by the Bureau of Labor), there are some 97,000 people that are unemployed,” he said.

The bill aims to assist businesses by lowering payroll taxes by almost half to encourage employers to hire additional workers. The act also extends unemployment benefits and connects the unemployed with potential employers.

“The American Jobs Act that President Obama has introduced is basically a $447 billion act that attempts to increase jobs in the U.S. as a whole,” Guettabi said. “The most important measures in the act are the tax cuts to the businesses and to the employees, and the infrastructure spending that’s essentially going toward construction and school modernization.”

A big part of the American Jobs Act is not only to reduce unemployment levels but also to improve the lives of Oklahomans, and Americans in general, who have been affected by the economic downturn.

“This is an Act that’s particularly targeting, for the most part, middle class families,” Guettabi said. “A lot of families have fallen on hard times when it comes to finding jobs, so the extension of unemployment benefits should make a little bit of a dent in terms of paying bills and making sure there’s food on the table. The middle class has been disproportionately hit by this particular crisis because layoffs don’t discriminate.”

Guettabi explained that the bill would also cut the payroll tax from 6.2 percent to 3.1 percent, providing the average American family with approximately $1,500 annually.

But though the state of Oklahoma, as well as the rest of the nation, will be receiving aid and it is estimated that 1.3 to 2 million unemployed will be put to work by the end of 2012, Guettabi stressed that the act may not be able to retain its effectiveness permanently.

“This act will not have a permanent impact unless it spurs private job creation, which is what it’s trying to do. This will be successful in the long run if these measures to encourage businesses to hire and to have people keep additional income somehow result in the economy getting back on track and being able to get back to job creation that’s not necessarily assisted by government expenditures.” Guettabi said. “This is a temporary relief that’s trying to get the economy out of a difficult spot.”