No Job Snow Job

Column for week of May 19, 2014

     Rarely does a day pass that I don't read about someone
fretting that new jobs aren't showing up fast enough.  This
lament may replace complaining about the weather as the
nation's number one pastime.

     Of course, the lack of new jobs is the President's fault. 
This is only fair.  If there were millions of new jobs, the
President would get the credit.  Never mind that the President
has about as much ability to create new jobs as a meteorologist
has to change the weather.

     It is embedded in our folklore that the President controls
the economy.  It would take far more than a single column to
even begin to explore why the President is credited with these
shaman like powers.  Perhaps a bit of understanding about jobs
would help to demystify the President.

     Hours worked and productivity per worker are all but
certain to shrink during a recession.  New workers aren't needed
to increase productivity.  In the early stages of a recovery the
existing work force works harder and more efficiently.  There is
no need for new employees until the old employees are
producing at full capacity.  Huge fringe benefits and other costs
of adding new employees encourage employers to work existing
employees to the limit before hiring new employees.

     The work force is dynamic, not static.  Even during years
when there isn't any net change in the number of jobs, millions
lose their jobs and millions find new jobs.  Increases in the
number of jobs don't mean that layoffs have ended.  Millions file
unemployment claims during the most prosperous of years.

     One reason productivity grew in recent years is the
increased efficiency that technology brought to manufacturing. 
The trend of downsizing the manufacturing work force has been
with us for decades.  It isn't over yet.  Some people see this loss
of manufacturing jobs as a bad thing.  For those who lose their
jobs, it definitely has a downside, in the short term at least. 
Usually workers who lose their jobs to innovation eventually get
a more productive, better paying job.

     The increased productivity of manufacturing jobs lowers
prices.  It benefits everyone.  It makes no sense to preserve
inefficient and costly manufacturing jobs just to reduce job loss. 
New jobs producing things which we don't now have is the
answer.

     Until imaginative, creative people with access to
investment capital find the ways to create new production,
employment growth will remain small.   Neither the President
nor all of the President's men can create those jobs.

     All government can do is create welfare jobs.  A welfare
job is one where the "employee" doesn't produce enough to pay
his wages.  The government forces others to make donations to
the "employee."  Disguising these welfare payments as wages
only thinly conceals that the "employee" is on the dole.

     The government may pay for welfare jobs with tax
dollars.  Or, it may force private employers to keep employees
that aren't needed for production.  Either way the results are the
same -- higher costs and a lower standard of living for everyone.

     Government interference with the economy and
employers serves mainly to stifle the creativity and initiative
essential to create new jobs.  The only way to create the millions
of new jobs to replace the old ones is for government to get out
of the way and unleash the creativity of entrepreneurs in the
marketplace.

     Those who claim that government action is essential to
create new jobs are giving us a snow job that won't create the
new jobs the unemployed workers need.  This is one more case
of government being the problem, not the solution.

aldmccallum@gmail.com
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Copyright 2014
Albert D. McCallum