Sunday, December 21, 2008

 

Government "Creating Jobs"--Someone Please Make It Stop

(Ha ha get it? My title has at least two meanings. One of which is mildly amusing.)

My next mises.org piece is going to tackle this whole notion of idle resources and how there is (allegedly) no tradeoff involved when the government directs workers and other resources into public works boondog--I mean investments in infrastructure. But for now, I just loved this confident comment over at Env-Econ where John Whitehead is getting attacked (with the rhetorical equivalent of cardboard tanks) for his claim that "green jobs are bogus":

Sniff, sniff... yes, that's it - I do smell reductionism. And packaged in an overly general assertion to boot - my, my!

Let's apply your point to highway construction. Are you really ready to defend your view that the massive investment the US government made in highways from the 50s onward did not contribute any net jobs to the economy, and that it only shifted the balance of jobs?

Yes yes yes, that IS what John should be saying. (Not sure if John had the courage of his convictions to go that far.) Would the unemployment rate have been 15% up through today, in the absence of federal highway construction? Or, did the construction of federal highways lead Americans to have more unprotected sex? If not, then clearly the federal highway program didn't contribute net jobs to the economy.

The only real way to create net jobs within the country's borders is to allow more immigration. Of course, that just destroys jobs in other countries.

So long as wages are allowed to adjust, unemployment will (certainly in the long run) sink to the "natural" level. Government policies can perhaps affect how high that "natural" level is. Other than that, government policies really affect real wages, not job creation per se, if we are talking about the long run. Even massive tariffs don't (in the long run) "destroy jobs" on net. In an autarkic economy, so long as the labor market is relatively free, everyone can still get a job. The (real) wages will just be a lot lower because of the protectionist barriers.



Comments:
I asked you this before, but I stumbled into using a triple negative last time (many years ago). Let me try again:

1) Is an Austrian forced to argue that the true "unemployment rate" today is lower than reported, since some people *could* take jobs at market rates, but hold out?

And also, a new question:

2) Why, exactly, should I be indifferent between someone burning coal and that same person building a windmill? I mean, I'm certainly not indifferent between someone dumping garbage on my porch and that same person building a recyclotron.
 
(1) No. The Austrian could argue that the unemployment rate would be lower if there were no gov't checks, but that doesn't alter the fact that it currently is what it is. (Let's ignore measurement biases a la ShadowStats.)

(2) That's fine, but if you have a program to take garbage dumpers and turn them into cyclotron makers, don't sell it as a jobs creation program. The guys at Env-Econ think there are huge negative externalities from GHG emissions, and they still agree with me that this "green jobs" stuff is bogus.
 
1) The question isn't about what policies would reduce unemployment. The question is about current classifications. The government will classify someone as unemployed if they are turning down positions at the market wage. The Austrian would say that that person is not *involuntarily* unemployed and so shouldn't count (as Austrian remedies iirc don't claim to get rid of these cases). Correct?

2) Okay, but just the same, you shouldn't say that a green jobs program will "merely" replace a fossil fuels job with a windmill job. Most people would regard that as a good thing -- no "mere" about it ;-)
 
(1) Oh OK, I didn't know what you were getting at. Yeah the Austrian distinguishes between voluntary and involuntary unemployment. During the 1930s there was involuntary unemployment, because government and union pressure (enforced through government-tolerated violence against "scabs" etc.) kept wages above the market-clearing level. Right now, much of the unemployment would be voluntary in that sense. There are still distortions because of minimum wage laws, FICA, unemployment insurance, etc (i.e. it's impossible for an employer to literally pay someone $1 an hour legally), but the spike in unemployment is a market phenomenon. Of course, the condition of the market has been driven by Fed etc. policies in the past...

(2) OK fine, but again, in context I am linking to an Env Economist who is arguing that we need to distinguish the benefits to the planet from the benefits to net job creation. And the quotation was from someone who says we can get both.
 
I do not agree that "green jobs are bogus". Helping environment and society is helping ourselves. I believe "Nature is Health". Why we are so uneven when we speak about social and environmental cause. If we are contributing something towards "Green Jobs" then that does not mean we are into a big loss. Be positive for the future and lets share our knowledge with different means like spreading the word via different CSR and Green Jobs sites... personally i prefer Justmeans site, many experts, green, social and environmental companies place their strategic plans and analyze the structure of Green Jobs on JustMeans. JustMeans is the only one of such site which brings all companies and individuals together on one platform to discuss and learn more on the topics of Green Jobs, Corporate Social Responsibility, Development, Energy and the Environment, Ethical Consumption, Politics and Governance, Social Investment, Social Media and Sustainable Business, then please do visit JustMeans site. I thank you for highlighting this issue on your blog.
 
Bob, don`t look now, but your very own IER keeps promoting a "jobs" program of its own - the one where the oil industry promises jobs and does favors for politicians by giving them more royalties to play with.

I know that IER is in the pocket of the oil industry, but I fail to understand why they couldn`t make a stab at an even-handed response to the public choice predicament (the struggle between those who want pristine public lands those who profit from producing from public lands) by suggesting that royalties be rebated directly to consumers?

 
Everyday I have the same big concern about the environmental movement associated by global warming. Nothing happening great for decades. I am not thinking or hoping for any miracle but very few are worried about Global Warming, Green, Renewable Energy etc. A small contribution from many of us will help our planet to sustain. Circulate the word with the help of Green sites like JustMeans. JustMeans helps us to learn, share the knowledge, debate on the topics like Green Jobs, Corporate Social Responsibility, Development, Energy and the Environment, Ethical Consumption, Politics and Governance, Social Investment, Social Media and Sustainable Business. Your one click can save the earth, so pleas click on http://www.justmeans.com
 
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