WASHINGTON, Jan 7 (Reuters) - If the U.S. Congress does not pass an economic stimulus plan soon the country will lose another 3 million jobs in 2009, former U.S. Labor Secretary Robert Reich said on Wednesday.
“Unemployment will rise to 10 percent of the workforce by the end of this year, and under-employment -- including people working part-time who would rather be working full time, and those too discouraged even to look for work -- will reach 15 percent,” said Reich, who served under former President Bill Clinton and has consulted with President-elect Barack Obama about correcting the current downturn.
“Without federal action, next year could be even worse,” he said while testifying at a U.S. House of Representatives Democrats’ forum on a stimulus bill.
The Bureau of Labor Statistics will release data on Friday on how many jobs the country lost in December. In November it lost 533,000 jobs, helping to bring the unemployment rate up to 6.7 percent, according to last month’s reports.
Mark Zandi, chief economist at Moody’s Economy.com, told the same forum that he expects Friday’s report to show 500,000 more Americans were put out of work last month.
Reich, who is currently a public policy professor at the University of California at Berkeley, called for a stimulus package of at least $900 billion spent over two years -- much larger than the proposals currently being discussed.
Along with promoting expanded jobless benefits, Reich said the federal government should help state and local governments, but he warned that there may be pitfalls to boosting infrastructure spending.
“The challenge will be to do it quickly,” he said, and suggested that some public works projects be earmarked for the long-term unemployed, minorities and women.
Reich said the U.S. Congress should not be wary of borrowing to pay for economic stimulus, pointing out that at the end of World War 2 the country’s debt was more than 100 percent of gross domestic product.
Currently, Reich said, the debt ratio is below 50 percent. (Reporting by Lisa Lambert; Editing by Leslie Adler)