The case for direct job creation

November 9th, 2017 at 9:55 am

Over at WaPo, and notice the support for the idea from all kinds of different bedfellows, from progressives like myself, Darity et al, to centrists like former Clinton Treas sec’y Rubin, to Trump’s chief economist!

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12 comments in reply to "The case for direct job creation"

  1. Smith says:

    There is a place for government assistance in help the long term involuntary unemployed. But there is no need for putting expensive government programs ahead of measures that allow previous market systems to work. Raising the minimum to $15/hour and eventually to $20/hour would do a lot to boosting employment (long term). Making public colleges free would help. Unfortunately in New York, the new program doesn’t include part time students (those most in need). Subsidies tend to operate to lower wages, not produce new jobs, and the studies proving they work are suspect (I read a few this blog had noted previously). They also cost the taxpayer money for work provided private industry.
    I would favor free quality child care that allows people a choice of whether to work.
    I would favor some reform in education as major states like New York, New Jersey, Massachusetts spend near $20,000 a year per student. How? Is New York City really getting its money’s worth?
    Government programs that encourage growth, and raising taxes on the rich to take away their capturing 20 percent more of national income since 1980 is critical.

    Please don’t talk to me about more government spending on jobs when you allow the top 10 percent in income distribution to take in $3 trillion dollars more a year than they would under the distribution of 1980. You’re not seeing this as a critical element in any discussion of economics, government spending, demand, the effect on job opportunities, speaks volumes. Get the $3 trillion a year back first. Then we’ll talk.

    • Smith says:

      *in helping the (‘in help the’, first sentence)
      *lot to boost (‘to boosting emloyment’ third sentence)
      *are critical (‘since 1980 is critical.’ last sentence first paragraph)
      *Your not seeing (‘You’re not seeing’ second sentence second paragraph)
      Let’s hope my economic analysis is better than my proof reading.

  2. B L Davis says:

    Another popular job creation policy that is a very costly failure is the race to the bottom by cities and states to lure corporations via multiple kinds of tax cuts in exchange for additional jobs. I believe the state of Washington is already feeling the revenue loss from the deal they struck with Boeing, and jobs have been cut rather than gained. And there are numerous other examples.

    I am working on a project to better inform Economic Development Commissions on options for real job creation. My definition of economic development is that the business or service must pay more in taxes to the municipality in which it is located than it uses in services. .

  3. Smith says:

    Perhaps a federal law to ban such practices could be devised. Mostly, this is unfair to existing companies paying their fair share. Maybe the legislation could be fashioned along those lines, that existing companies can not be made to pay higher rates than newly formed, located, or expanded entities. It’s a question of basic fairness, and also involves interstate commerce as states compete against each other for business. Some federally imposed fairness doctrine would have to be argued for to cover intrastate competition between municipalities. A way must be found to have legislation pass constitutional muster.

  4. elkern says:

    Dr. B – in the WaPo article, your 1st suggestion (subsidies) seems more like something the GOP would do. It’s another subsidy for business – Sure, it would promote More Jobs, but as a secondary effect, rather than a direct one. Implementing it would be messy (would the subsidies apply to part-time jobs? high-end jobs? H1B jobs?). Enforcing rules would require hiring State/Fed workers (OK, more jobs) to patrol abuse by unscrupulous businesses; decent employers would complain about Another intrusive bureaucracy; and down the line a few decades, it would all get snarled up by Regulatory Capture.

    And even if it were a good idea, your timing is lousy. IMHO, the Democratic Party shouldn’t be wasting time & air on GOP-lite ideas now; they need to focus on the more “direct” option of funding sorely needed Infrastructure projects. Fixing bridges, etc, will create jobs directly in the short/medium run. And in the long run, better infrastructure improves productivity AND Quality of Life.

    Preventing Obama from getting any credit for an improving economy was so important to the Republican Party that the obstructed any action on Infrastructure. Thus, we lost 8 years and got Trump.

    Now would be a good time for an ambitious Infrastructure proposal from the Democrats. It shouldn’t be hard (even for the Dems) to show how such a plan would benefit 99% of us more than the GOP’s Tax-Cuts-for-the-Rich “Reform”.

  5. Bob Palmer says:

    As to your urging that Democrats prepare to hit the ground running: I totally agree. Yes, there is the old adage, ‘Never distract your opponent while he is busy shooting himself in the foot’. And for the past year Dems have followed that advice, to good advantage. But that year is now past, and one of the most important elections in my lifetime is less than a year away. I am more alarmed every day by the lack of action by well-placed Democrats. Where are they? Things are better out here in flyover country – our local DFL monthly meeting earlier this week was very well attended, people are enthusiastic, and there are new strong like-minded grass roots organizations in operation. So the crew is ready. But it appears that there is no one on the bridge. Are all the officers asleep in their cabins?

  6. Denis Drew says:

    WHAT PEOPLE REALLY NEED AND WHAT COULD BE QUICKLY AND EASILY (AND VERY “NATURALLY” DONE [THINK GERMANY-DENMARK]) is to upgrade their bargaining power to squeeze all the consumer market will bear — while reconstituting their atrophied political muscle at the same time.

    In eighth-grade math terms: if Burger King can pay $15/hr with 33% labor costs, Target can pay $20/hr at 10-15%, Walmart $25/hr at 7%.

    In eighth-grade math terms the “middle 59%” can tax the top 1% out of more than half their income, which top 1% income SHARE more than doubled over past two generations. Top 1% now take three trillion dollars out of national thirteen trillion income. Which tax money can feed the pockets of the “middle 59%” so they can pay more for products produced by the bottom 40%.


    After reading this last year, I guessed “yuppie” progressives might at last find (electoral) value trying to rebuild labor union density: “Republicans would have no place to hide.”

    Nothing. So I came up with this. 3% of California voters could put making union busting a felony on the ballot — one step to law books.

    Then I read about this. Preemption Chinese Wall — so everybody thought.

    So I came up with this. First Amendment protection of organizing covers state labor protection for organizing when such protection is the necessary condition for organizing in that state. Nor can fed labor law that was designed to make it safe for unions become the hermetic seal against state help — while doing nothing (in this era) itself.

    Still nothing Then I read this piece.

    MUCH BETTER DEAL, if you want to make waves that everybody (anybody) notices (even the media!).

    Congress: Why Not Hold Union Representation Elections on a Regular Schedule?
    Published November 1st, 2017 – Andrew Strom
    Best idea yet — play perfectly into Repub tactic to force government unions to re certify yearly.

    States: Preemption bars setting up union elections. Not prevent making union busting a felony — per First Amendment and Congressional original intent for NLRA.

    The far-out wilder each may seem to the reader per cultural inertia — potentially the bigger the waves for everybody to (including media) to notice. We’ll see. ???

    PS. Can’t get minorities out to vote because alienated and don’t expect anything for any candidate? Let alienated voters set up their own (favorite) ballot initiative (available in some form in most states — 12 go all the way to the law books in different steps) — then do the “shills around the block” supporting their self-dealt hand. Will vote Democratic while they are in there.

    • Smith says:

      It is not the 1% taking $3 trillion. They take an additional $1.5 trillion or 10%. Then the next 9%, meaning the top 10 to 2% earners take another 10%. That’s how you get to $3 trillion, and only if your national income figure is $15 trillion, not $13 trillion.
      This is fundamental to understanding the problem, scope, and chances for success. You are not up against just the 1%, it’s the top 10%, which is why Obama and Clinton and Schumer (ironically now the most powerful of the three), tread lightly.
      The top 1% can’t run the country all by themselves, but the top 10% definitely does.
      Since there are about 120 households, and about 3 people per household in the top 10 percent, it’s a difference of 3.6 million making up the 1 percent, vs 36 million making up the top ten percent. Those 36 million are more likely to vote, as are the college educated too. College grads are 36%, but make up 50% of voting public. Hard to believe Hillary lost? Not if money trumps education.
      “Income distribution
      Of those individuals with income who were older than 15 years of age, approximately 50% had incomes below $30,000 while the top 10% had incomes exceeding $95,000 a year in 2015.[3] The distribution of income among individuals differs substantially from household incomes as 39% of all households had two or more income earners. As a result, 25% of households have incomes above $100,000,[15] even though only 9.2% of Americans had incomes exceeding $100,000 in 2010.[3]”
      Important regional differences here, keep in mind cost of living and housing partly responsible for coastal inflation.

  7. Smith says:

    As you could tell from my first comment above (on Nov 9) I favor raising the minimum to $15 and eventually to $20/hour. Already being phased in, in California and New York (though NY has lower rate outside NYC metro area), which combined is 17% of the U.S. economy. Not your average experiment.
    However, unions are there own worst enemy and it’s no accident their decline is broad across industries and geographical areas. While not dismissing the long and effective war against unions, it’s hard to find a good example in the U.S. and easy to point out their deficiencies. Fortunately, restoring inequality does not depend on reviving unions.
    Think of the fight for $15. Union support and popular support was crucial, along with some fortunate political calculations and prosperity in NY, California, and Seattle. The miscalculations of many large employers also helped. But I said before, this is legislated, not negotiated in a union contract. Same with OT and exempt status, which doesn’t even need legislation. Bush got his changes pushed through, and Obama failed, just like he mishandled the Supreme Court vacancy fiasco (counting Hillary would win, and he’d get lame duck congress to consent to his pick).
    Other needed labor reforms like mandated vacation, universal health care, paid sick leave, free quality child care, and my special attention to ending or sharply curtailing exempt status, eliminating the special exempt qualification for tech workers, and giving all labor including and especially legal immigrants, complete labor rights (eliminating employee sponsorship requirements), a phased in reduction in the work week to 35 hours (time and half above), a phased in reduction to voluntary retirement (to 60 years), a crackdown on discrimination race, ethnicity, age, and especially the gender pay gap of 5 to 10 %, are legislative matters.
    Wages can’t go up until you tax away the $3 trillion, a figure I get from an estimated $15 trillion national income and Saez papers (where is your $13 from?). Again, congress not unions, public support at the polls, not organizing.
    Right to work does not matter. Unions make that their number one issue sometimes because they want the money. The truth is right to work should make it easier to win union certification. No wonder unions lose.
    I favor stronger unions, and consideration of repealing Taft Hartley, but unions have to earn back America’s trust. Meanwhile, none of the important measures listed above depend on union contracts. Just like the original 40 hour week, minimum wage, social security, medicare, workman’s compensation, unemployment insurance, all these are laws.

  8. Smith says:

    * restoring equality
    Definitely not “restoring inequality”
    or restoring a measure of equality enjoyed by post WWII generation
    or something like that.