Can the President Really 'Create' Jobs?

[Jon Katz]

Part of President Obama's proposed $825 billion economic stimulus package includes $500 billion allocated as "green" spending, which the president says could add nearly 4 million jobs.

As reported in the Christian Science Monitor:

"A new energy economy is going to be part of what creates the millions of new jobs that we need,” Mr. Obama told reporters last month. “That’s why my economic recovery plan is going to be focused on how can we make a series of down payments on things we should have done 10, 20, 30 years ago.”

But is the government really capable of "creating" such jobs?

Here's what Jacob Sullum of Libertarian magazine Reason had to say:

Sen. Debbie Stabenow (D-Mich.) recently told The New York Times, "we need to demonstrate that, in fact, jobs are created." Stabenow, whose state is heavily dependent on coal, is rightly concerned about the economic impact of Obama's cap-and-trade plan for reducing carbon dioxide emissions, which will sharply increase the cost of fossil-fuel energy. But she is mistaken if she thinks that "green jobs" can compensate for the economic pain that plan must inflict in order to work.

Sullum concludes that the jobs that Obama's plan will supposedly "create" will actually be offset by the jobs it will kill in the process.

He continues:

To know whether Obama's cap-and-trade proposal makes sense, we need to know how likely those outcomes are and how costly they would be. We also need to know how likely it is that his plan actually would prevent the dire results of which he warns and, crucially, at what cost.

The other factor to consider is demand. How realistic are the president's plans to convert the nation's dependence on fossil fuels to renewable energies such as wind and solar? As noted in the Christian Science Monitor article, solar and wind manufacturers also are laying off employees due to decreasing demand.

Of course, that could all change with government mandates to adopt alternative energies, i.e. fuel economy standards for the auto industry. But then we're back to the question: "How much will all of this cost?"

[Mark McLaughlin]

I think last year's high gas prices, sadly, have turned Americans into a country of nervous penny-pinchers. Too much money had to be poured into our fuel tanks, and so now we're all looking at the price of everything with nervous suspicion, much like my grandmother at a yard sale. Wonderful, intelligent woman, but she'd lived through the Depression and so, anything that had to do with spending money turned her into a elderly human version of the robot B9 from the old LOST IN SPACE TV show: "Danger! Danger!"

Certainly, jobs can be created. Haven't we all heard the expression, "You have to spend money to make money?" Apprehension over spending money ultimately worsens a recession. For example, newspaper headlines scream "Recession Growing Worse" -- and then the newspapers wonder why their business clientele are taking out less or no ads. In the metro area where I live, one newspaper has gone out of business and another had changed from weekly to bi-weekly. No one wants to spent money on ads -- which is a false economy in itself, because businesses need to INCREASE their visibility during bad financial times, to get more customers, since they need to make up for the fact that existing customers will be spending less.

One national concern that is working to increase its workforce during this recession -- rather than downsizing -- is the United Association, a labor union for plumbers, pipefitters and sprinkler-fitters. General President Bill Hite stands firmly behind Obama's infrastructure plan. He has taken a pro-active, aggressive stance and has pledged the support of his 350,000-member association to the plan.

The UA has made it a goal to have 50,000 apprentices in training this year, creating an infrastructure of mobile training facilities, online studies, accelerated training and other educational options.

Where does the money come from, to train all these workers? From the UA Members, who contribute 10 cents per hour to fund educational UA programs.

Right now the UA is training groups of Native Americans, who were experiencing unemployment problems, to do welding in Chicago and Phoenix. This training will lead into apprenticeships and eventually careers as journeymen.

Meanwhile, in the Seattle area, the UA is training returning veterans to do welding -- this work will also lead to apprenticeships and careers as journeymen. The UA training received by the veterans -- the UA VIP program -- is different from other veteran employment programs in the construction industry in that the veterans also receive two weeks of transitional training to help them adjust to civilian life.

So as you can see, there are concerns in America that are spending money to make money, because that is what it is going to take to dig our way out of this recession: pro-active, aggressive action. That is what the UA is doing and of course, that is what Obama is doing.

-- Mark McLaughlin, mark@ncpr.com

[rbrooku]

Can anyone, ANYONE, tell me any other possible business sector aside from energy that can, at least in part, re-inflate the capital lost in the real estate market? If some significant capital is not created to replace the capital lost in the real estate market then we can all expect this severe recession to turn into a full blown depression and how many of us will escape the bread lines if that happens?

So the question is not so much of how much will it cost to create this new "green" and "renewable" energy market, but rather can we afford not to do it? If we cannot afford it, and cannot NOT afford to do it, well we shouldn't be surprised when this forum shuts down and IndustryWeek goes out of business because no one could afford the wherewithal to read it.

[Ted Duboise]

I have been saying for months that creating new jobs is wonderful. BUT, we have a skills gap in America. There are millions of jobs available now with not enough skilled workers to fill them. Open jobs are posted everyday. We must train unemployed workers in new skills for the jobs that industry has open now. Creating new jobs is great but who will fill them? I think it's time education met industry - and changed education so that workers will meet the skills requirements of industry. Remember: there is no income gap in America - there is a skills gap.

[Doogleass]

It seems to me that for the past couple of decades, at least, high school students have been encouraged extensively to go to college - that is the only way to be able to earn a decent living. Accordingly, too many high school students strive to meet that goal when many of them are actually better suited to work in the trades and should be pursuing technical schools and union apprenticeship training programs.

In most cases, young people who have the aptitude for trades will do far better in those trades, relative to earnings, than they ever would as mediocre workers in traditional white collar positions. There is ample evidence of this phenomenon presently, as many college graduates are unable to secure jobs in their field of study and they have expended small fortunes in obtaining their college educations for which they are deeply in debt with student loan obligations. If this country and any stimulus efforts are to be successful, this trend must be reversed. So many of the manufacturing, service, and construction job opportunities available today require high levels of technical expertise because the tools in use in those industries today are highly sophisticated with computer controls. There is a dire need for trained workers with both technical skills and old-fashioned horse sense to fill the needs that will necessarily be associated with any growth in the heart of our economy - the value-added aspect of industry.

I think that is how jobs will be created, and it won't happen overnight. Any optimism that pumping a ton of money into the economy in the fashion that is being proposed is hollow.