Friday, March 6, 2015

Jobs Are Not All Created Equal

Not All Jobs Are Created Equal
It is a fact that not all jobs are created equal, they vary in pay, hours worked, responsibility, how hard someone works, and much much more. Often job numbers and statistics fail to make this clear and reflect a poor picture of the true employment landscape. A big discrepancy exist between government and private sector jobs and the same might be said about union and non-union jobs.  In all reality creating jobs in a mature market should be required to pass a certain "taste" test. This is something many politicians and those in Washington often fail to grasp.

It should be pointed out that while America is creating jobs it has come at a huge cost. By this I'm referring to the massive government deficit which is the fuel driving our still rather weak growth. Just as important as the number of jobs created is whether these are the right kind of jobs and their quality. We need jobs that will last. When a job falling outside the description of government worker, fails to make economic sense, it becomes a form of working welfare and the taxpayer is left picking up the tab. Many of the jobs created because of easy money combined with artificially low interest rates that move consumption forward also fall into this category. We as a country and as a society pay dearly for each unsustainable job created through government incentives and partnerships, because of their nature many of these jobs should by all rights be called temporary.

A great weakness in government generated jobs is after a huge outlay to set up, or put them into action, they often do not create or contribute to production. If these jobs are not asked to continually justify their cost they tend to merely become another burdensome cost to society. The feeble efforts to think through and link a job to a sustainable economic base that creates a needed product and generates real value is a major flaw in most government aided ventures. An enterprise must be profitable to qualify as sustainable. Once started government sponsored ventures are often slow to react or adjust to economic reality, this can be seen in the Postal Service and its inability to drop Saturday delivery.

Two examples of government over involvement come to mind from the city in which I live, the first I will call Kitty Hawk. In Fort Wayne, Indiana years ago the city aggressively backed a bond and the loan to build a massive hanger at the airport for an air-freight company named Kitty Hawk. The city lured the company to the area because it promised a slew of new jobs where they located their hub, the company is now bankrupt and the jobs are gone. The taxpayers of Fort Wayne are now paying for an empty hanger that they are trying to lease at a "aggressively" low price. This hurts those private investors and property owners that lease building space as they are now forced to compete against their own government to which they are forced to pay taxes.

An example that I have used before in other writings is the mind boggling, and hard to defend venture known as Citilink. This is Fort Wayne's pathetically under used money losing bus system. Every day buses running their predetermined routes crisscross the landscape of the city completely empty, it is more uncommon to see a rider then not. Funded by Federal monies as well as local real-estate taxes, most people give little thought to this economic failure. One could site that the poor or those without transportation need this service, but the cost of this inefficient system is huge. Burning through fuel and polluting the air as they transport only a few riders, it is hard to argue that they make the city green or that the jobs are economically sustainable.

It has become a common practice across America and much of the world for governments to actively compete for companies that offer the prize of coming into their area and creating a number of good paying jobs. Often governments hurt local businesses when they invite a company like Amazon into their community by offering tax incentives to construct a distribution center. This can be a dagger into the hearts of existing businesses. Anything that gives one company an unfair advantage over another tends to lessen the ability of the other to remain competitive, this can result in the destruction of real jobs. Solyndra, the solar panel company that received a $535 million government-backed loan then went belly-up should be placed in the dictionary as the definition of what happens when politicians and bureaucrats play businessman with taxpayer money.

The recent calls coming from Washington to increase pay and benefits in an effort to help take spending and the economy to a higher level fail to consider that for much of America's small businesses the numbers simply do not work. Again, we find small  business once the backbone of this country is under attack from the unintended consequences of the many laws and mandates passed in recent years. Inspections, a plethora of permits, licenses, taxes, insurance requirements, and regulations make it almost impossible for a small business to open, compete, and operate legally. Big government has become toxic for small business. Only by taking the foot of government off the throat of small business and letting them breathe will we again begin to see real sustainable non-subsidized  jobs form and grow.


  1. Bruce, I (Jim Davis) uploaded two tables on the web site. Please look at them and reply!

  2. Jim thanks for the comment. Your attachments show how American workers income from 1968 adjusted for inflation showed little real growth despite considerable productivity gains. Looking at your charts I found them very interesting.
    Many factors need to be considered but I fear a great deal of the flat earnings over the last several decades is the result of the intentional shift of manufacturing jobs overseas. Manufacturing is the crux of creating wealth in any economy. Much of the stagnate wage growth is the result of the decision to develop China into an economic powerhouse during the 70s to counter balance Russia.
    As for the inflation it took off after an expensive war in Vietnam and a key reversal in America's trade account. It shifted from surplus to a deficit as other countries became more competitive using low wage workers, goods from Japan and China have flowed into America. We have also spent a massive amount of dollars on oil causing the dollar to lose value. It is clear from these charts the American worker has little to celebrate.