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Why Politicians Shouldn’t Create Or Save Jobs
In this economy, politicians talk about how they have created or saved jobs for their constituents, but what does that mean, exactly, and in what context would that be good for us? There are several examples of how they might go about performing such feats, and upon more careful examination, I’m not sure any of them are actually to our benefit.
Just to be sure we’re on the same page, let’s begin with a definition of these two concepts.
- To “create” a new job means to do something that causes someone to be hired for a position that isn’t already held by someone else. If someone else is being fired or replaced in order to hire the new person, it’s a pre-existing job, not a “new” job.
- To “save” a job means to do something that prevents an existing position from becoming eliminated, transferred, or outsourced. If an employee simply isn’t working out and a replacement employee is hired, while the original individual has “lost” his or her job, the job itself continues to exist.
With these definitions in mind, let’s explore possible ways that someone might create or save a job. Before we begin the exploration of this topic, however, let’s keep one important concept in mind: a politician represents all of his or her constituents in government, and should act with their common best interests in mind; an individual without a job is just one of the politician’s constituents, and serving him or her should not be at the expense of the common good. Lastly, let me caution you in advance that the examples provided herein will be instructional, but severely over-simplified.
Long, long ago, in a savannah far, far away, before Internet shopping, before grocery stores, and before even tribes, there was a period when each of our living ancestors of the day was responsible for obtaining his or her own food. If you’ve ever camped, hunted, or fished, and if you try very hard to imagine feeding yourself without the benefit of a rifle, bow and arrow, or rod and reel, you may begin to recognize that a sizeable chunk of your day is expended just to find and overcome prey for yourself. My memories of camping always circle back to the fact that seemingly-vast quantities of firewood burn in much less time than it takes to collect them Although I’ve never hunted or seriously fished, I can’t imagine those efforts are more productive than collecting firewood, especially when performed without tools. Further, without refrigeration, even a large kill wouldn’t last long. So, back in those days, all living people had jobs: to find and provide food for themselves. Those who didn’t perform well at this job didn’t feed themselves and died. Employment=100%, but I doubt any of us would want to return to that era.
Fast forward a few generations, and at some point, someone discovered agriculture and domestication of livestock. Instead of wondering where the next meal might come from, people knew – it would come from the farmer or rancher. The fruits and vegetables were growing, the chickens were laying eggs in their cages, the cows could be milked at will, and the pigs and lambs could be slaughtered as needed. While killing animals, picking produce, and preparing meals still required a little time, the bulk of the time that used to be required to track, stalk, find, trap, and carry food back to feed oneself was no longer a factor. In fact, farming and domestication of livestock made food acquisition so much more productive that it no longer required 100% employment in order to feed the population.
While a comparatively-small group of people continued to be involved in the food-producing vocations, many were freed up to pursue other interests. Some built the facilities in which the food production was performed or the machines that performed the food production more efficiently and some became security guards for those facilities. Besides those directly or indirectly involved in food production, trades were established as some became cobblers, blacksmiths, fletchers, bowyers, tanners, builders, and shipwrights. While one cannot subsist on a diet of shoes, since the farmers could produce more than enough food for themselves, they could trade their surplus food for the cobblers’ surplus shoes, and as a result, all parties involved enjoyed a higher standard of living. Whereas people spending most of their day stalking prey might not have time to make good footwear, clothing, homes, or tools, now, with most of the population freed up by technological advances, there were opportunities for them to enjoy all of this and more.
When we talk about creating jobs, this is what one might imagine as the shining example of job creation: a technological improvement in one area that permits people to pursue other areas of interest, making the whole of civilization richer as a result. Upon more careful examination, though, this really isn’t job creation at all, but it’s actually job attrition. 100% of people were employed in providing their own food, and then a huge percentage of them were laid off, made obsolete by technological advances. OK – they weren’t really laid off – they could have continued doing what they were doing yesterday, and provided food for themselves (just as you could for yourself), but systemization of the industry made them so ridiculously inefficient compared to the alternative that they preferred to pursue other interests (just as you probably have).
So what do politicians mean when they say they’ve created jobs? Is it something along these lines? Is it something by which they are freeing up swaths of population from dull, unproductive, menial jobs to permit them to enrich society with art, poetry, and music? Probably not. When FDR did it, he hired people to build dams and bridges, to build rock walls on property lines, and to engage in parks and conservancy projects. While these may seem like admirable projects and efficient use of otherwise unemployed labor capacity, why had the projects been put off until then, and when he hired those unemployed people to perform such work, what happened to the employees of the viable construction companies he didn’t hire?
Furthermore, these jobs weren’t magically created – not only did he engage labor to do work that wasn’t important enough to do earlier, and not only did he hire the unemployed labor from a section of the market that had been displaced by other better-run companies instead of hiring those better-run companies, but he paid for it with public money. This meant that the people who still managed to earn a taxable income during those tough times were compelled to pay for projects that either weren’t necessary or weren’t economical, and that hired laborers who must on average have been less productive than the laborers that weren’t out of work, rather than reward the well-run companies that were still in business and were still paying salaries to people.
OK, so extreme situations may require extreme measures, but the mindset persists still today. President George W Bush created a lot of jobs, too. The Department of Homeland Security that he created has ballooned into a behemoth. In addition to all the US Customs, Immigration, and USDA agents that always used to be present at every US international airport and seaport, we now also have an army of TSA agents. If you’ve travelled internationally recently, you may also have noticed that there are so many flights into this country from around the world that we can no longer even provide security for all of them within the space of our own airports. Not only has outbound luggage screening been relegated to what used to be the front-end of our airports, but we’ve now also installed agents in the larger, more frequently-travelled foreign airports, to screen passengers before they get onto their inbound flights.
Whereas we used to have some number of international airports in this country, each staffed with federal agents for security enforcement, think about how many foreign countries there are and how many international airports each of them has. I shudder to think about the number of federal agents we must now employ to facilitate this paradigm. The other countries don’t do this, so we’re either being overcautious or they’ve figured out how to do it another way. Oh, and although you’ve probably guessed, for sake of completeness, let me point out that the employed taxpayers are the ones paying for these jobs the politicians have created.
When politicians talk about creating jobs, I’m not relieved; I’m incensed – it means they’ve hired people with my tax money to perform some function that I probably wasn’t missing before, rather than do something with my money that I’d really want done, like hire contractors to pave the roads. I’d prefer that they keep their meddling hands off and just let the economy take care of itself. When they “create” jobs, we pay the bill, and if these created jobs were truly necessary and important, don’t you think someone else would have hired someone else to do them long ago?
What about “saving jobs?” These are predominantly jobs that are being paid for by something other than my tax revenue, so saving them must be good, right? Probably not. If you’ve followed stocks at all, when companies announce layoffs the price of their stock typically rises. When a company decides to relocate a division to a tax-advantaged state or to outsource a department to another country where labor costs a fraction of what it does here, the price of their stock rises. Why, if jobs are being lost would investors bid up the price of such companies? Those investors know that the layoff will not be random, but will predominantly be of the less-productive employees; the work will still all get done – just more efficiently. They know that the move to a state willing to provide tax concessions will reduce the company’s expenses, making it more productive. They know that while management and the executives will be retained, the move of the company to a less expensive country will save a wad on labor and benefits costs, allowing the company to either invest more back into itself or pay out larger dividends to the shareholders. In short, they know that such actions will be good for the business, and for them if they own the business.
How would a politician “save” those jobs? One way or another, he has to make up to the company what they would be getting if they went ahead with their job-cutting plans. Guess who’s paying for that? Whereas I could pay less to buy my car if the manufacturer were able to build it cheaper somewhere else, now, someone else will get the benefit of the cheaper car while my tax money goes to make it “cheaper” for that manufacturer, right here. Their employees will be happier because they’ll still have jobs, but who is really paying for those “saved” jobs? It’s not the employer, and it’s not the people reaping the benefit of the “cheaper” finished goods; it’s the local tax-payer, while his or her money is used to entice that company to keep those jobs here. His taxes will either increase or the services he receives for his tax payments will be reduced to cover the new job-saving expenses.
Creating and saving jobs are just two of the latest euphemisms for redistributing the wealth. Yes, as I mentioned before, I know that some people will be unemployed without such measures. I also know that unemployment insurance is just another method of redistributing the wealth, so even if our politicians don’t create or save jobs for these people, I know that those of us with taxable incomes will still be paying to support the unemployed. The difference, however, is that the creation or salvation of a job has a more permanent connotation to it, whereas unemployment insurance has a less permanent connotation. Salary is thought of as being indefinite, but insurance is thought of as paying out a benefit and then being exhausted until additional premiums are paid in.
The problem with the system is not that we need to invent jobs for people and not that we need to encourage jobs to stay here rather than move to places where they can be performed more economically or more efficiently (which saves us all money on purchasing the fruits of that labor). The problem is that we need the unemployed hunter-gatherers to retrain as cobblers. Anyone can still go hunt for his or her own food, but not nearly as economically and efficiently as big business can do it. This frees us up to pursue other endeavors, but we must find ones that are profitable so we can earn enough revenue to buy that food from its producers. Should the government have saved every buggy-whip manufacturer so that those jobs would be secure despite the fact that we no longer use horse-drawn buggies? Think about who would be paying for that.
When I was “in between jobs” a bunch of years ago, I briefly collected unemployment insurance. My experience with the system was that it was exactly backwards. Rather than encourage the unemployed to find work or to train for new positions, it encouraged laziness and passivity, and in-fact discouraged employment and education. A minimum-wage job would have paid less than unemployment insurance was paying me to sit on my couch, and couch-sitting isn’t quite as difficult and thankless a job as those that pay minimum wage. Unemployment benefits, however, are only available to people who are ready and willing to work; those in school are predisposed, and are thus ineligible (at least that’s how it worked at the time).
I was similarly discouraged from putting time or effort into my fledgling business; whether it earned a meager income that day or not, if I worked at it for a minute, calling prospects or reading bid documents, I was ineligible to claim benefits for the day. Unemployment insurance should operate on a declining rate; every week the benefit should go down. At some point it will make those minimum-wage jobs start looking pretty good, and as if by magic, the unemployed will find work. Unemployment services should not only provide job retraining, but it should require it – on any day of claiming benefits, the claimant should be required to attend a few hours of classes on resume writing, interviewing skills, general education (math, English, foreign language, etc), or specific job skills, such as basic computer usage, typing, sorting & filing, or telephone etiquette. Such classes could be offered in the mornings, afternoons, and evenings, to permit time for beneficiaries to still apply for jobs and attend interviews.
I don’t want the government creating or saving jobs – there’s no shortage of work to be done already. Instead, encourage the population to advance their skills, experience, and education, and to retrain or relocate themselves as necessary to find work. To hire them with my tax money or to encourage some business to hire them with concessions paid for by my tax money only makes us all less productive on average.
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