Creatin’ Jobs

With 25 million Americans unemployed or under-employed, exactly how do you “create jobs”? Some think if you lower taxes for rich folks, they will run out and hire people with the extra money. Funny, politicians have tried this before, and oddly, the impact on jobs consistently has been … virtually nothing. They didn’t get rich by randomly hiring whenever they got more money without actually figuring out what those new hires would actually make or serve that someone would be willing to pay for. Rich folks may be the nation’s big employers, but their tax rate has no correlation to job-creation.

Others say that we need to create a stable environment in which jobs can grow in a more predictable marketplace, most importantly by cutting the massive government deficits and bringing our debt in line with our ability to pay as we go. There is some truth to folks being more likely to make expansion decisions in a stable environment, but to get that kind of stability, the government has to spend less. And since what most of the government money actually goes to is labor, even the labor necessary to build military hardware, by definition, if the government is directed to spend less, massive layoffs are a necessary result. Just like the 300,000 civil servants who just got notice under the new Greek austerity program. Hmmmm. But the kind of government stimulus needed to create those jobs is so far below the trillion and a half dollars needed to make a dent than any politician has suggested… that there won’t be much of difference under any such plan.

So what creates jobs? The government can hire people if it chooses to, whether as civil servants or to work the government infrastructure projects that typified the New Deal hires during the Great Depression. Companies tend to hire for only reason only: to satisfy consumers (or businesses if they are in the B-2-B space, but it usually ends up with either the government or consumers at the bottom of the demand curve anyway). In the absence of demand, you have to be mentally ill to start staffing up and making stuff hoping someone might show up to buy it! So with consumer confidence at a general all-time low and government cutting its spending, guess what? There is not only very little sustainable demand right now, but it seems as if the demand that does exist will fall even more when the government forces those layoffs, and those laid off start spending even less. Hmmm.

Longer term investing in our future does pay dividends and create jobs: building infrastructure, supporting cutting-edge research and education our youth for a competitive future. Spending money on military programs and social benefits is just spending money, most certainly not an investment. Guess what we’re doing?!

Government regulation, say some candidates, is killing jobs. Maybe, but the tough answer is that even the most restrictive clean air regulations don’t have that much impact on the employment picture. “Even with all the attention on hiring, the government’s ability to create jobs is pretty dispiriting, no matter who is in charge. The most popular types of jobs programs involve state tax breaks or subsidies that seek to seduce a company from one state to another. While this can mean good news for ‘business-friendly’ states like Texas, such policies don’t add to overall employment so much as they just shuffle jobs around. This helps explain Rick Perry’s claim that more than one million jobs were created under his watch in Texas while the rest of the country lost more than two million.

“The federal government does something similar when it decides, for instance, to regulate oil drillers and subsidize windmill makers. Such a policy might help the environment but it just moves jobs from one sector to another without adding any. And while both Perry and Mitt Romney propose that further oil and gas drilling in the U.S. will transform the jobs picture, only 30,000 Americans work in oil and gas extraction, and about another 125,000 in support occupations. With more than 25 million Americans unemployed or underemployed, it’s unlikely that any changes in that part of the energy sector would make a real dent.” New York Times, November 3^rd.

Name me a candidate who will tell you either that the government will create the needed jobs or that we are just going to have to wait until the economy sort all this out. Oh, there aren’t any. They just want to say anything to get elected. Cutting the budget may be terrific for future generations (who may be suffering from under-employment because part of that cut hammered away at the education they needed to compete with the rest of the world), but it will have a very opposite result from job creation.

I’m Peter Dekom, and it’s time that the American electorate came to grips with the reality that not one single viable candidate on either side of the aisle has proposed anything significant that will materially alter our unemployment picture any time soon.