Nouriel Roubini : Jobs a Problem for years

Roubini's Video interview from Davos with CNN Money

Economist Nouriel Roubini says it will take years for the U.S. unemployment rate to return to pre-recession levels. Jan 26, 2011

Nouriel Roubini We need to create the 1,50,000 jobs for every month

Question : Are things looking any better, given what we have seen in this week?

Nouriel Roubini : I would say no. First of all, if you look at the ISM report of manufacturing, they details of it, the inventories versus new orders was terrible, that suggests the actual economic activity is going to slow down manufacturing. The survey of ISM was actually falling, the numbers on jobs last Friday were good only because the expectations were so low. But 67,000 jobs are not enough stabilise the employment rate. We need to create the 1,50,000 jobs for every month to make sure that unemployment rate doesn’t go higher.
via www.moneycontrol.com

Nouriel Roubini on jobs creation and economic Growth

Nouriel Roubini : "....If you don’t create jobs there is no labour increment, there is no consumption growth and the risk of a double dip becomes worse. Paradoxically in the last few quarters there has been a switch of distribution of income from labour to capital and to profits and these profits are not being reinvested and firms are not hiring workers. What can we do is difficult, we are in a process of deleveraging which is going to occur for a while. What can we do?—I would try to subsidise the demand for labour. I think instead of having an investment tax credit that boosts even more capex spending, this capital intensive, I would do a temporary cut in the payroll tax for two years. If you want to increase demand for labour rather than demand for capital, I would do a payroll tax rather than investment tax like Obama has suggested. So that would be something that reduces their labour cost for the producers."