Network News

X My Profile
View More Activity

A job is a job

stimsweeping.JPG

I've been getting some e-mails from conservative readers saying that, sure, the stimulus created jobs, but they were all public sector, so they don't count. "There were none, or very little, private sector jobs saved or created," writes one correspondent. "The million plus jobs being touted as saved/created are all government jobs; federal, state and local."

That's hard to believe: The bill included $288 billion in tax cuts for individuals and corporations. If that money didn't create even one new private-sector job, then the Republican belief in tax cuts requires some serious revision.

But more to the point, what's the problem with public-sector jobs? At a moment when the private sector's demand for labor was sharply contracting, the public sector hired people to pave roads and build bridges and repair sewers and work on green energy development. Those aren't fake jobs: They pay salaries, and have benefits, and keep people busy between 9 and 5. Many of them were done by private companies that bid for the contract, and when they won the contract, didn't have to make the layoffs they would otherwise have had to make.

To put this slightly more sharply, I'd bet a construction worker whose job was saved by the stimulus thought that her situation was much more like having a job than not having a job, even if the state provided the money that ensured the paycheck.

Photo credit: By Daniel Acker/Bloomberg

By Ezra Klein  |  February 17, 2010; 3:55 PM ET
Categories:  Stimulus  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati   Google Buzz   Previous: Who owns us?
Next: Next steps for stimulus

Comments

It is a simple way for conservatives to apply their ideology. Just pretend that any other ideology that accomplishes creating jobs doesn't actually create jobs (and redefine terms as necessary to accomplish this rhetorical coup).

The truth is that conservatives really care much more about net productivity than jobs. Sure, they will tack on "and this helps create jobs" on top of every tax cut (or regulation cut) they propose, but they just do that for political reasons.

Posted by: JonShields31 | February 17, 2010 4:01 PM | Report abuse

Pushing a broom.

A job Ezra Klein has never done.

Posted by: MarkinJC | February 17, 2010 4:02 PM | Report abuse

The bill included $288 billion in tax cuts for individuals and corporations. If that money didn't create even one new private-sector job, then the Republican belief in tax cuts requires some serious revision.

NO Republicans believe tax cuts create jobs when the recipient of the tax cut is a corporation that if under-manned to exploit business opportunities.

If allow corporations whose bottom line might likely benefit from utilizing an increased work force to exploit new business opportunities to keep more of their profits, they will hire. OBAMA& PELOSI rigorously designed THEIR tax cuts to exclude any such corporations though.


And Public Sector jobs suck. That is to say they are a net minus on our long-term GDP---they suck revenues.

Posted by: FastEddieO007 | February 17, 2010 4:02 PM | Report abuse

How do they think the government creates jobs? The only way I know is by spending money.

Now, you can argue that either direct hiring, contracts, or tax incentives have a great bang for the buck. But, they all invovles the government spending money, like it or leave it.

Posted by: ideallydc | February 17, 2010 4:04 PM | Report abuse

"the public sector hired people to pave roads and build bridges and repair sewers and work on green energy development."

In North Carolina roads and bridges are not built by the public sector. The public sector hires private contractors to do the building, with the public sector (transportation dept) managing the contract.

Posted by: BottyGuy | February 17, 2010 4:10 PM | Report abuse

Teachers don't have jobs. Policemen don't have jobs. Soldiers don't have jobs. Firemen don't have jobs.

Bankers, they have jobs.

Clear now?

Posted by: fuse | February 17, 2010 4:10 PM | Report abuse

FastEddieO007 :And Public Sector jobs suck. That is to say they are a net minus on our long-term GDP---they suck revenues."

So I guess that means that air traffic controllers don't add to GDP by keeping planes from crashing into each other, firemen don't save buildings from destruction, policemen don't allow commerce to continue by arresting those who don't follow the rules of paying for what you want, etc. FastEddieO007, you are clearly a "government is the problem" kind of guy. This ideology led to the deregulation of the financial markets that brought us CDOs, MBSs, megabanks too big to fail without bringing the entire economy down (resulting in the bank bailout that you no doubt opposed). This deregulation ideology brought us the junk mortgage products and the process of writing mortgages without actually insuring that people could actually pay them back. Without government to create a more level playing field and establish rules that keep the most egregious excesses and abuses of markets that unbridled capitalism encourages, this country would be even more of a plutocracy that it already is. FastEddieO007, I guess you think that this would be a good thing, but I don't.

Posted by: srw3 | February 17, 2010 4:16 PM | Report abuse

"The bill included $288 billion in tax cuts for individuals and corporations"

It included $288 billion in temporary tax relief and tax incentives, which are different than what conservatives normally define as "tax cuts". Just to be clear.

Still, it was something.

Posted by: Kevin_Willis | February 17, 2010 4:20 PM | Report abuse

*The public sector hires private contractors to do the building*

And what would those employees of those private contractors be doing if North Carolina did not have any money to pave roads and build bridges and repair sewers?

Posted by: constans | February 17, 2010 4:21 PM | Report abuse

I know for a fact that the stimulus directly helped save (and maybe even create) jobs in the nonprofit sector.

And beyond the construction labor, you've got government contracting with engineers, urban planners, and other consultants.

Why else would Republicans be going to all those ribbon cuttings for projects they voted against? Those projects create jobs in their regions.

Posted by: slag | February 17, 2010 4:22 PM | Report abuse

One thing that Ezra is missing, of course, is the difference between "support/cost center jobs" and "value added" jobs. A private sector job can be a "core" job that generates revenue-- the person who builds a salable product, the sales representative who sells it to clients, engineers who design it, etc. These jobs add tangible value, and that has its own economic multiplier effects. Companies also have "support" positions which are not directly tied to the delivery of their end products or services, and these are generally regarded as a "cost center"-- they may be necessary, but they cost money and don't directly "add value" in terms of things like sales generation. The perception is that for the government, all jobs are essentially "support positions." They might be good and they necessary, but it's not like you can look at a government employee and say, "this person added $XX of economic development to the GDP" or "the work of this person resulted in a y% increase in tax revenues."

*It included $288 billion in temporary tax relief and tax incentives, which are different than what conservatives normally define as "tax cuts".*

Yes. Just to be clear, what conservatives define as "tax cuts" are "tax cuts passed by Republican congresses and presidents."

Posted by: constans | February 17, 2010 4:24 PM | Report abuse

"But more to the point, what's the problem with public-sector jobs?"

Gotta agree with that. Given I kinda work in the public sector, it would be silly not to.

But, to the point, those are real jobs that involve stuff that needs to get done. And the stimulus on projects that involve infrastructure--that's good long term stuff that is a net positive, even if the full benefits aren't seen during the administration that helps make them happen.

Public sector employment is not without problems--growing bureaucracy, benefits and compensation sometimes a little high given the work done, jobs held indefinitely regardless of performance . . . but some of that happens in the private-sector.

Posted by: Kevin_Willis | February 17, 2010 4:26 PM | Report abuse

@constans: "Yes. Just to be clear, what conservatives define as "tax cuts" are "tax cuts passed by Republican congresses and presidents."

No, what conservatives define as tax cuts are actual tax cuts, not over-qualified tax "incentives" and here-today/gone-tomorrow tax credits or temporary tax relief. Tax cuts are reduction in tax rates. It's not complicated.

Even the Bush "tax cuts" are, because of how they were executed, more in the line of "temporary tax relief". Which expires very soon.

Posted by: Kevin_Willis | February 17, 2010 4:30 PM | Report abuse

I got to work today on a private-sector created magical carpet.

Yep, no roads for me. No traffic laws. No traffic lights. No planners to make those roads straight and level. No guys to set the computers that control the traffic light timing. Nobody changing the bulbs in the street lights. Nobody to enforce the contracts that auto parts suppliers use to get pieces to each other. Nobody setting standards so one inch is the same one inch everywhere. Nobody keeping crude oil out of my high octane gasoline. Nobody passing laws against the guy smoking as he filled my gas tank. Nobody inspecting the gas pumps and issuing fines to make sure customers get a gallon when they buy a gallon. Nobody digging sewers so the roads don't end up underwater. Nobody clearing snow from the streets. Nobody with specialized training and equipment sitting in a truck with a radio connected to a centralized dispatch that I can reach by calling 911 just in case I bash into a pole.

Yep, just the almighty private sector making jobs possible.

And then I had lunch at my job...

Posted by: theorajones1 | February 17, 2010 4:30 PM | Report abuse

Ezra, you should ask your conservative readers whether they think, then, that a fortune initially built on government contracts -- Andrew Carnegie's, Ross Perot's, many others -- isn't actually a fortune.

Posted by: JeffersonSmith | February 17, 2010 4:31 PM | Report abuse

*No, what conservatives define as tax cuts are actual tax cuts, not over-qualified tax "incentives" and here-today/gone-tomorrow tax credits or temporary tax relief....*

... which you and the other Republicans would be heralding as "tax cuts" if a Republican had passed them.

Posted by: constans | February 17, 2010 4:36 PM | Report abuse

@constans: " * No, what conservatives define as tax cuts are actual tax cuts, not over-qualified tax 'incentives' and here-today/gone-tomorrow tax credits or temporary tax relief....*

"... which you and the other Republicans would be heralding as 'tax cuts' if a Republican had passed them."

Um, no. Because those wouldn't really be tax cuts. No matter who passed them. Lots of Republicans voted for the Recovery Act. Does that magically make temporary tax relief and qualified tax incentives "tax cuts"? No, they are still qualified incentives and gone tomorrow temporary tax relief.

Posted by: Kevin_Willis | February 17, 2010 4:42 PM | Report abuse

*Lots of Republicans voted for the Recovery Act. *

According to wikipedia: "No Republicans in the House and only three Republican Senators voted for the bill."

And if it had been an initiative spearheaded by a Republican president and a Republican congress, the republicans would be praising it to the high heavens as "tax cuts!" Look, here's the thing: there was a lot of Republican whining and moaning about the "wasteful spending of $700 billion!!!" in the stimulus. And then everyone pointed out to the whining republicans, "what are you talking about? there were tax cuts in it that made up 1/3rd of the total cost, just like republicans claim to like!" And after having realized that they have to be browbeaten over this point, the Republicans are simply retreating to, "oh, well, those tax cuts that make up the stimulus package are 'real' tax cuts." That's all this is, Kevin-- a petulant and weak whining from Republicans when they were caught, ultimately, opposing tax cuts that they themselves thought should have been in the stimulus.

Posted by: constans | February 17, 2010 4:50 PM | Report abuse

JeffersonSmith:
Don't forget Dick Cheney!

Posted by: randrewm | February 17, 2010 4:54 PM | Report abuse

Kevin, I have to sympathize with you on this one. The difference between pure tax cuts and tax relief is real, and important. But because of the political realities the latter is much more difficult to pass, so both get lumped under the heading of "tax cuts".

Case in point- Bush's stimulus two years ago was all tax cuts. More accurately, it was a one time rebate that didn't do any stimulating because nobody spent the money. They knew it was temporary so they didn't adjust their behavior.

I don't know the specifics of the "tax cut" package in the stimulus, so I'm going to avoid commenting on that. In general I subscribe to the "small multiplier" theory of tax cuts though, so I'd tend to believe that most of the job creation came from direct demand stimulation.

Posted by: Quant | February 17, 2010 4:56 PM | Report abuse

I appreciate that Kevin tries to be a rational conservative here, but he's wrong in taking the pulse of his party. If he were in congree he'd be subject to a primary challenge from the right. Possibly from Fast Eddie.

Posted by: Quant | February 17, 2010 5:01 PM | Report abuse

More importantly, the public sector jobs are the foundation on which private sector jobs rely. If the private sector is the engine of job creation, the public sector is the frame in which the engine runs. I've written on this before:

"The bottom line is, government and business need each other. The way the economy works is that the government lays the foundation upon which private companies build, and corrects externalities that result from market breakdowns. Government-employed police officers allow businesses to operate without fear of theft or intimidation. Government regulators enforce property rights that allow investors to create jobs without fear that their investments will be damaged by others (Republicans ostensibly support property rights, but they aren't doing much to protect my property right to a clean atmosphere). Government-subsidized hospitals help the working poor get better and get back to work. Government-employed teachers educate tomorrow's inventors and job-creators, while government scientists conduct crucial basic research - research that's not commercializable on any kind of investment time frame, but which lays the groundwork for the next 50 years of growth. And yes, government environmental regulations prevent companies from dumping waste into our drinking water and polluting our air - kindof important services, don't you think?

"his is the narrative liberals need to tell, the counter to the brutish but intuitive thinking of "taxes bad, regulation bad, markets good." Low taxes increase profits on iPads and iPhones, but it took government-educated brains to create them."

http://akwag.blogspot.com/2010/01/yes-government-creates-jobs.html

Posted by: akent07 | February 17, 2010 5:08 PM | Report abuse

the reason for the bush tax cuts expiring is that Bush didn't pay for them with spending cuts and hence to make them amenable to reconciliation, they had to expire. I would ask Kevin Willis, where exactly he would like to cut back on the federal government to make any of the bush temporary tax cuts permanent?

There is a lot of talk from "conservatives" about tax cuts with no way to pay for them, by either raising other taxes or cutting government services. It's not conservative to drive the country deeper into debt by rewarding the top 10% of income earners with even more money (not to mention using deficit spending to fight 2 wars and give a vast new benefit to medicare users.)

It would have been conservative to keep the Clinton era surpluses coming so that when the inevitable turn down did happen, the government would be in a better fiscal position to deal with it.

Posted by: srw3 | February 17, 2010 5:14 PM | Report abuse

What akent07 said. And while we are at it, there is this little thing called the world wide web, whose architecture was designed by government scientists who wanted to link computers together to do research. There would be no internet without DARPAnet, a totally government funded project.

Posted by: srw3 | February 17, 2010 5:18 PM | Report abuse

I think the basis of the anti-govt jobs view is that when businesses DO start to grow again they can go straight to the desperate throngs of long-term unemployed and have their pick. If you create public sector jobs then highly-skilled, talented people will flow into them, meaning that private business will actually have to lure them back out instead of dictating terms -- we couldn't have that.

It's a similar argument to what the conservatives wanted with the SCHIP expansion -- make the parents of sick kids demonstrate they'd been uninsured for at least a year to qualify JUST in case a private insurer might be able to extract some revenue out of them.

Posted by: NS12345 | February 17, 2010 5:26 PM | Report abuse

"I would ask Kevin Willis, where exactly he would like to cut back on the federal government to make any of the bush temporary tax cuts permanent?"

Why should we cut back anywhere? Where are we cutting to pay for TARP or The Recovery Act or the upcoming jobs bill? Seriously, when does the government cut much of anything?

Also, when you say cut, you mean "cut rates of growth", don't you? Because tax revenues tend to grow, even when taxes are cut. Perhaps not enough to make up for the cuts, but it's not a zero-sum game.

And we don't ever really cut anything. Even the "spending freeze" effects about 1/8 of the budget. What kind of budget freeze is that? And that's after fat increases were locked in. That's not a freeze, that's just a shell game. And it would almost certainly be the same if the Republicans were doing it. Not saying it wouldn't. Just to be clear.

But, if we had to cut something to pay for the tax cuts, I'd say slash the wages of federal employees, especially those making over $75,000. And take it from there.

We could get out of Afghanistan and Iraq, if you're cool with that. And cut foreign aid to dictators and despots. I think that would be smart. Even Bill Clinton found that he could cut the tea taster's board. There's stuff that could probably be cut.

Posted by: Kevin_Willis | February 17, 2010 5:33 PM | Report abuse

randrewm, I try very hard to forget Dick Cheney, although he keeps reappearing and making it difficult. But I take your point.

srw3, good point, and it's not just the internet, it's most computational technology and the various developments that made it possible. Without government R&D contracts, no ENIAC, no silicon chips, no Intel Corp., and on and on. And, of course, without government-supported hydroelectric projects, there wouldn't be elecricity to run computers on in large parts of the country -- mostly those populated by libertarians who use that electricity and their government-enabled computing power to write angry blog posts about how terrible the government is and how it can't do anything right.

Posted by: JeffersonSmith | February 17, 2010 5:35 PM | Report abuse

Government workers pay rent or mortgages, buy food and clothing, go to movies and to dinner, buy cars etc........in other words the money they earn goes right back into the private sector economy. It helps support businesses large and small. People who spend money for goods and services help the economy regardless of where they work or who pays them and in a recession that's what matters, people spending money.

Posted by: dnf42580 | February 17, 2010 5:37 PM | Report abuse

@Quant: "I appreciate that Kevin tries to be a rational conservative here, but he's wrong in taking the pulse of his party."

In this particular case, that's not what I'm trying to do. I probably would face a primary challenger, if I were a congressperson. Despite my deep love of tax cuts. Mmmm. Tax cuts.

I don't think Obama is purposely trying to destroy the economy, so I wouldn't necessarily make a good tea party guy.

Posted by: Kevin_Willis | February 17, 2010 5:38 PM | Report abuse

@constans: *According to wikipedia: "No Republicans in the House and only three Republican Senators voted for the bill."*

You are correct. My bad. I was thinking of the TARP, which is a totally different boondoggle. Which I think was mostly crap. Yet, it was voted for by Republicans in reasonably large numbers and signed by a Republican president. I also think the Medicare Part D thing was a boondoggle, and I don't care for No Child Left Behind. I also don't much care for pre-emptive wars or using 9/11 as an excuse to expand government bureaucracy with the creation of The Department of Homeland Security, as if our problem before 9/11 was a lack of sufficient bureaucracy.

"That's all this is, Kevin-- a petulant and weak whining from Republicans when they were caught, ultimately, opposing tax cuts that they themselves thought should have been in the stimulus."

Okay. To be clear, I'm not speaking for any collecting Republican entity, just myself, and perhaps the language. Temporary tax relief is temporary tax relief. Not a tax cut. In the same way that spending at the same level next year as you did this year is not a "draconian budget cut". Tax incentives are just that, not tax cuts.

On the other hand, I am glad to see that Obama and the Democrats are acknowledging that tax cuts--even if they aren't, technically, actual cuts in this case--help stimulate the economy. That's good news. :)

Posted by: Kevin_Willis | February 17, 2010 5:45 PM | Report abuse

"But more to the point, what's the problem with public-sector jobs?"

They join a union and try to extort money from the taxpaying public through the political process and oppose investments that would raise productivity because it would cost them jobs. Just look at how the state and local governments of California have been brought to the brink of insolvency by over-generous pay and pension programs.

Posted by: tbass1 | February 17, 2010 6:06 PM | Report abuse

Washington, DC and its surrounding suburbs (notably northern Virginia) have managed to survive the recession quite well. Last time I checked, the area relies on millions of public sector jobs to keep its economy going.

Further, this economic stability -- even growth -- in places like northern Virginia has helped Virginia as a whole to avoid many of the budget ills afflicting other states. But you hardly hear conservatives acknowledge these facts...god forbid they don't fit into their preconceived schematic of "government = bad".

Posted by: howardclh | February 17, 2010 6:17 PM | Report abuse

Anyone who thinks that the stimulus did not preserve and/or create jobs in both the public and private sectors is simply expressing their own economic ignorance.
Jobs are created by business and/or consumers choosing to purchase goods and services which require employees to produce. When corporate and individual incomes went down because of the great recession, fewer purchases were made and, thus, jobs lost, or not created(jobs are lost and created all the time-in bad times, more are lost than created and in good times, vice-versa). The stimulus increased incomes, thus, increasing purchases, thus preserving and creating jobs. Stimulus money used for direct purchases of goods and services, or transferred to state/local govts to continue providing services and employing providers of public services such as teachers, police and fire persons preserves/creates jobs providing those goods and services and, of course, enables those persons to purchase other goods and services. The whole point is to make up for the purchases not being made by private business and individuals.

Posted by: gregspolitics | February 17, 2010 6:33 PM | Report abuse

gregspolitics,

I don't think anyone thinks that NO jobs were created but we're just debating the value of the created jobs and if the private sector could have created more and more importantly created long term jobs instead of one year fixes that are expiring shortly with nothing more than some nice infrastructure to see for all our tax dollars. You see they're in limited supply nowadays and I'd like to think the government would stop wasting them but they're not.

Posted by: visionbrkr | February 17, 2010 6:38 PM | Report abuse

The jobs created/maintained are the jobs created by people being able to purchase the goods and services they want to purchase because they have the income to purchase them. The private sector wouldnt have created other jobs because there would have been no jobs to create if people werent spending the money the stimulus enabled them to spend. The public service jobs affected were basically jobs already in existence to provide services that people wanted before, and still wanted, for education, police, fire and other services. The jobs purchased by infrastructure funds are private sector jobs producing goods and services that would not otherwise have been getting purchased because of the recession. The whole point is to be a short term fix to maintain/create jobs until businesses and consumers again have the incomes to maintain/create a higher level of employment.

Posted by: gregspolitics | February 17, 2010 7:35 PM | Report abuse

@Visionbrkr:
"some nice infrastructure to see for all our tax dollars."

Ask people who fed their families with money made working for the WPA during the Great Depression whether public sector jobs don't count. They built public works projects that are still standing, thanks to that great socialist president Franklin Roosevelt. We could use some more of that public infrastructure, also known as roads, bridges, public schools and libraries.

Posted by: friscokid | February 17, 2010 8:20 PM | Report abuse

The problem with the stimulus and the jobs that were created/saved is that those jobs are very temporary--it's unsustainable. In order for the stimulus to have had a great and permanent effect, the government would have to pass a stimulus every year until Bernanke stops being a nancy-boy and do his job, increasing the inflation rate target to at least 4% and infusing money into the banking system instead of being so cautionary.

As for the tax cuts... tax cuts in general are clumsy things. They're like throwing a dart in the air while drunk... you need to be sober and aim very well in order to hit the appropriate target for anything to come of it. I appreciate the tax cuts since I benefited from them but nothing in the stimulus bill pushed up aggregate demand, which is what we needed.

As for AD: Bernanke? Where the hell are you, man?

Posted by: edmigper | February 19, 2010 2:15 PM | Report abuse

The comments to this entry are closed.

 
 
RSS Feed
Subscribe to The Post

© 2010 The Washington Post Company