Self Directed Investor Inc
SDI: "Empowering investors with ideas and education"
Symbol Lookup »  

  • Other news: News from PR Newswire
| More

JOBS and Government Policy

Tue, Nov 6, 3:32 PM ET, by Bob McTeer

(My previous post examined for students the anatomy or pathology of the October jobs report. This post continues with some policy philosophy or suggestions related to jobs.)

At the national macro-economic or policy level, having higher levels of employment and lower levels of unemployment are highly desirable. Having more people pulling the wagon and fewer people riding in the wagon makes the wagon move along a lot easier and faster.

In my opinion, the role of government related to jobs is to promote a healthy economic environment so that the demand for workers, primarily by the private sector, will accommodate all those who are able, willing and want to work. But jobs for jobs sake, is probably not a proper goal of government policy.

Jobs should not be the primary goal of public policy, but the by-product of other desirable goals. Jobs should be the means to an end, and not the end itself. Let me illustrate what I mean by extreme examples, using Frederic Bastiat's technique of reductio ad absurdum.

You can increase the number of jobs by outlawing heavy construction equipment and requiring construction workers to use shovels. You can get even more jobs by substituting spoons for shovels.

Large hurricanes, like Sandy, can create clean-up jobs and stimulate GDP growth, although, as Bastiat pointed out in his Broken Window Fallacy, much of the spending will be diverted spending rather than net new spending. Nevertheless, in a slack economy with high unemployment, I would expect some net stimulus.

Government can increase employment by hiring the unemployed to dig ditches on Monday Wednesday and Friday and fill them in on Tuesday and Thursday. All these things will create jobs, but they are obviously not good ideas. I'm not recommending them.

They are not good ideas because better ideas are much more plentiful than the workers available to execute them. There is always more worthwhile things to do than people available to do them. That scarcity problem is largely what economics is about. I repeat: the shortage is not in our needs, but in the workers available to fulfill those needs.

Governments can save jobs by discouraging new technology or outlawing labor-saving devices like automatic elevators and automated telephone service. Think of all the elevator operators and telephone operators we've lost in recent decades, but we are better off for losing them because those people moved on to do other jobs that machines can't do so well.

Think of all the farm jobs lost to tractors and other farm equipment, and all the factory jobs lost to labor-saving technology, equipment, and computers. Think of the lowly bar code that makes the lines go faster at the check-out counters, raises the productivity of the check-out girls and boys, and relieves them of the need to do arithmetic. Someone ought to write an ode to the lowly bar code.

You get the point.

I'm reminded of what they used to call the factory of the future a few years ago: The factory of the future had only 2 employees: a man and a dog. The man was there to feed the dog, and the dog was there to keep the man from touching the computer. My point is not to count jobs, but to make jobs count.

Actually, and this sounds very counter-intuitive, you can probably measure national economic progress more by the jobs destroyed, than by the jobs created.

It once took about 90 percent of our population to grow our food. It now takes about 2 percent of our people to grow more and better food. Do we bemoan the farm jobs lost or celebrate the productivity gains that they represent?

The farm workers, or more likely their children, got to go to the factories and mills for good, higher-paying manufacturing jobs. But over time, manufacturing jobs gave way to service-sector jobs—because of invention and innovation on the factory floor. This job churn hasn't been abrupt, but it has been unrelenting.

Do we try to turn the clock back and regain those farm and factory jobs, or do we educate and train ourselves for the new higher value-added jobs of the future. The most impressive young people I've run across lately have been the young people working behind the genius bars at Apple stores. Come to think of it, apples to Apple might be a good metaphor for our economic progress over the decades.

Good guidelines for government policy on jobs might be: Don't try to protect jobs made obsolete or unproductive by technology or trade (domestic or international). Don't try to protect jobs by tolerating or creating inefficiencies. Go ahead and accept the productivity enhancements in one area and let the lost jobs migrate to other areas. Instead of trying to save particular jobs or groups of jobs, the government should encourage a vigorous private sector so that aggregate demand will be able to absorb those caught up in creative destruction or the job churn.

What causes wages to increase in real terms and what ultimately causes increases in our standards of living are productivity gains—increases in output per hour worked. Ironically, such productivity gains that improve the lot of workers are based on acceptance of new technology, including labor-saving technology. Workers benefit from more output per worker, not more workers per task.

So, you students get your job security through education and keep your job security through lifelong education—and not necessarily in the classroom. If you listen to Prairie Home Companion on the radio on Saturday afternoons—which you probably don't, but should—you would be familiar with the ad for power-milk biscuits. They give you the strength to get up and do what needs to be done.

Let's do what needs to be done, and the jobs will come.




SDI Glossary: "GDP" Definition
This Article's Word Cloud:   Jobs   They   Think   about   available   because   been   better   code   decades   economic   equipment   factory   farm   future   gains   good   government   higher   ideas   increase   jobs   labor   levels   lost   more   much   needs   other   people   policy   private   probably   productivity   saving   sector   should   spending   technology   telephone   than   that   them   they   those   wagon   what   will   with   workers

| More

Todays Retail News Reel
Tue, Feb 7, 10:11 AM ET, by

Here is what we are paying attention to in today's news:Time To Get Into Dollar ...

Happy Birthday Frederic Bastiat
Sun, Nov 27, 2:41 PM ET, by Bob McTeer

Fifteen years ago, I had the honor of giving the keynote address in Dax, France, ...

Todays Retail News Reel
Thu, Aug 11, 10:51 AM ET, by

Here is what we are paying attention to in today's news:Time To Get Into Dollar ...

Happy Birthday Frederic Bastiat
Tue, May 31, 3:31 PM ET, by Bob McTeer

Fifteen years ago, I had the honor of giving the keynote address in Dax, France, ...

Britain Builds a Better Soda Tax
Tue, Mar 22, 4:12 PM ET, by Donald Marron

Britain will soon tax sugary drinks. Whether you love that idea or hate it, youve ...

Budgeting for Federal Lending Programs Is Still a Mess
Wed, Mar 2, 1:52 PM ET, by Donald Marron

On Monday, the Government Accountability Office (GAO) defended the current method for budgeting for federal ...

How Should We Use the Revenue from Taxing Carbon?
Tue, Feb 23, 4:52 PM ET, by Donald Marron

Adele Morris co-authored this post. A US carbon tax could raise $1 trillion or more ...

Happy 70th Anniversary to the Council of Economic Advisers
Tue, Feb 16, 7:12 PM ET, by Donald Marron

The Council of Economic Advisers celebrates its 70th anniversary this week. You can read a ...

Todays Retail News Reel
Sat, Feb 13, 9:41 AM ET, by

Here is what we are paying attention to in today's news:Time To Get Into Dollar ...

What Should We Do with the Money from Taxing “Bads”?
Fri, Jan 29, 1:13 PM ET, by Donald Marron

What do indoor tanning, shopping bags, junk food, alcoholic beverages, tobacco, "gas guzzling" cars, ozone-depleting ...

November Jobs Report Seals the Deal for December Lift-Off
Tue, Dec 8, 2:42 PM ET, by Bob McTeer

The juxtaposition of last week's weak IMS Manufacturing Report and the desire of the FOMC, ...

Yesterday's Jobs Report Seals the Deal on Rate Lift-Off
Sat, Dec 5, 11:52 AM ET, by Bob McTeer

The juxtaposition of this week's weak IMS Manufacturing Report and the desire of the FOMC, ...

Should Governments Tax Products That Are Fun But Harmful?
Tue, Nov 10, 2:12 PM ET, by Donald Marron

Should you face an extra tax if you drink soda? Eat potato chips? Uncork some ...

Let the Fed Pay For Our Roads and Bridges/Heaven Forbid Users Should Pay Through Tolls and Gasoline Taxes
Thu, Nov 5, 5:11 PM ET, by Bob McTeer

Okay, the House passed a highway bill (a good thing) that included resurrecting the Import-Export ...

Audit the Fed! Oh, Wait. The Fed is Already Audited
Fri, Oct 30, 5:11 PM ET, by Bob McTeer

The Audit the Fed folks, including two in the latest Republican presidential debate, are being ...

Ben Bernanke's Memoir
Sat, Oct 24, 12:11 PM ET, by Bob McTeer

Ben Bernanke's memoir is out. It's a very thick book. ...

The Shrinking Budget Deficit and the Slower Growth of Debt
Sun, Oct 11, 4:11 PM ET, by Bob McTeer

The U.S. budget deficit for the fiscal year 2015, which ended in on September 30, ...

The Trans-Pacific Partnership: Are We Up To The Challenge?
Wed, Oct 7, 5:11 PM ET, by Bob McTeer

" What protection teaches us, is to do to ourselves in time of peace what ...

Did the Weak September Jobs Report Derail a 2015 Rate Hike?
Sat, Oct 3, 10:51 AM ET, by Bob McTeer

Probably. It wasn't just the weaker-than-expected gain of 142,000 payroll jobs in September that disappointed, ...

An Obvious Point About Fed Transparency: They Can't Signal What They Don't Know
Thu, Sep 17, 1:41 PM ET, by Bob McTeer

(I'm writing this before today's FOMC decision is announced, because my point has nothing to ...

Can Nudges Improve Government?
Wed, Sep 16, 3:32 PM ET, by Donald Marron

Behavioral "nudges" can increase college enrollment by low-income students, boost health insurance take up, encourage ...

A $15.00 Minimum Wage in New York State Would Be A Self-Inflicted Wound
Fri, Sep 11, 1:51 PM ET, by Bob McTeer

Governor Cuomo's proposal for a $15.00 minimum wage in New York is bolder than most, ...

The Employment Report - Not Bad Enough To Derail Fed Action
Fri, Sep 4, 12:11 PM ET, by Bob McTeer

Like Wagner's music, the August jobs report is better than it sounds. Not great, but ...

Todays Retail News Reel
Mon, Aug 17, 10:31 AM ET, by

Here is what we are paying attention to in today's news:Time To Get Into Dollar ...

The Yuan and the Dollar
Thu, Aug 13, 5:31 PM ET, by Bob McTeer

In March 2003, I was in China making the rounds of universities, government agencies, and ...

Reflections on the Greek Tragedy
Fri, Jul 17, 3:51 PM ET, by Bob McTeer

(This was written on July 8, 2015.) In the late 1980s, I spent about 16 ...

Everything You Should Know about Taxing Carbon
Thu, Jun 25, 10:42 AM ET, by Donald Marron

Climate change is hot. From the popes encyclical to the upcoming United Nations conference in ...

The Fed Should Act on July 29
Mon, Jun 15, 3:41 PM ET, by Bob McTeer

I agree with the consensus view that September 17 is the most likely date for ...

Trade Is Not About Counting Jobs; It's About Making Jobs Count
Fri, Jun 12, 12:41 PM ET, by Bob McTeer

I view the House vote today on trade-promotion authority, a necessary prelude to an important ...

Monetary Freedom
Fri, May 29, 12:31 PM ET, by Bob McTeer

Okay, I confess. I usually drive under the speed limit to avoid getting stopped for ...

Return of the Cicadas
Tue, May 26, 9:42 AM ET, by Donald Marron

The worlds most fascinating insects live in the eastern United States. Periodical cicadas spend most ...

Our Weakening Economy Is Getting Harder To Ignor
Sat, May 16, 2:21 PM ET, by Bob McTeer

We had two decent GDP quarters in mid-2014, and that's about it. The 4th quarter ...

Productivity Is Down: Are U.S. Workers Slacking Off?
Mon, May 11, 12:41 PM ET, by Bob McTeer

U.S. labor productivity fell at a 1.9 percent annual rate in the first quarter, the ...

The FOMC's Cacophony
Sat, Apr 11, 12:51 PM ET, by Bob McTeer

When Buddy Holly was little, he insisted on getting on the stage with his uncle's ...

More on the Euro-Dollar Exchange Rate
Fri, Mar 13, 6:21 PM ET, by Bob McTeer

Nineteen countries now use the Euro as their currency. Fifty states use the Dollar as ...

Dollar-Euro Parity? Let the Market Figure It Out
Wed, Mar 11, 3:11 PM ET, by Bob McTeer

In recent years, in response to those who complained about our "weak" dollar and longed ...

Let 'Er Rip, Janet; Let's Get It Over With
Sat, Mar 7, 3:11 PM ET, by Bob McTeer

"Let 'er rip, let it fly; Come on baby, say it, do you think I'm ...

Three Things You Should Know About Dynamic Scoring
Fri, Feb 27, 10:12 AM ET, by Donald Marron

The House recently changed the rules of budget scoring: The Congressional Budget Office and the ...

Current Monetary Policy: A Keynesian Distortion
Wed, Feb 18, 4:31 PM ET, by Bob McTeer

One amusing thing about watching financial TV these days is that no analyst wants to ...

Todays Retail News Reel
Wed, Feb 18, 9:21 AM ET, by

Here is what we are paying attention to in today's news:Time To Get Into Dollar ...

Tax Policy and Investment by Startups and Innovative Firms
Mon, Feb 9, 2:32 PM ET, by Donald Marron

Our tax system includes many provisions to boost business investment, particularlyby startups and innovative firms. ...

Inflation Targeting or Deflation Avoidance?
Sun, Feb 8, 4:11 PM ET, by Bob McTeer

. ...

A Strong Dollar Doesn't Attract Foreign Capital - Expectation of a Stronger Dollar Does
Wed, Feb 4, 7:51 PM ET, by Bob McTeer

Whether the dollar is strong or weak matters for our exports and imports because their ...

Fourth Quarter GDP Reverts to the Weak New Norm
Sat, Jan 31, 4:21 PM ET, by Bob McTeer

Real GDP increased at only a 2.6 percent annual rate from the third to the ...

Congratulations to Congress on the Pipeline
Thu, Jan 29, 5:19 PM ET, by Bob McTeer

. ...

Are All QE's the Same?
Mon, Jan 26, 12:11 PM ET, by Bob McTeer

. ...

Is a Strong Dollar a Good Thing or a Bad Thing?
Sat, Jan 24, 5:31 PM ET, by Bob McTeer

You are probably way ahead of me on this, but I'll say it anyway: It ...

Fri, Jan 16, 6:11 PM ET, by Bob McTeer

She promised us patience in 2015 No premature rush to tighten So, I’ll be patient ...

Rolexes Just Got More Expensive - Or, You Can't Keep A Good Currency Down
Thu, Jan 15, 8:41 PM ET, by Bob McTeer

The Swiss National Bank, Switzerland's Central Bank, surprised the world this morning by removing its ...

New Year's Eve in Terlingua (12/31/03)
Wed, Dec 31, 1:41 PM ET, by Bob McTeer

Another year has come and gone, We're back to New Year's Eve. Getting ready for ...

  More articles:  1 2 3 4 5 6 7 next »


JOBS and Government Policy | Self Directed Investor | Copyright © 2008 - 2017, All Rights Reserved

Any ideas and opinions presented in Self Directed Investor content are for informational and educational purposes only, and do not reflect the opinions of BNK Invest, Inc. or any of its affiliates, subsidiaries or partners. In no way should any content contained herein be interpreted to represent trading or investment advice. None of the information contained herein constitutes a recommendation that any particular security, portfolio, transaction, or investment strategy is suitable for any specific person. All site visitors agree that under no circumstances will BNK Invest, Inc,. its subsidiaries, partners, officers, employees, affiliates, or agents be held liable for any loss or damage caused by your reliance on information obtained. Read Full Disclaimer.

SDI is associated with: -- a subscription-based online social networking forum of serious individual investors. | -- videos appearing on SDI are produced by Market News Video. | -- stock quote content appearing on SDI is at least 20 minutes delayed and is powered by Ticker Technologies. | -- Edited by Scott V. Nystrom, PhD, Gold Stock Strategist provides analysis on gold mining companies.