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Thomas Sowell
Thomas Sowell
21 Oct 2014
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Jobs or Snow Jobs?

Comment

President Obama keeps talking about the jobs his administration is "creating" but there are more people unemployed now than before he took office. How can there be more unemployment after so many jobs have been "created"?

Let's go back to square one. What does it take to create a job? It takes wealth to pay someone who is hired, not to mention additional wealth to buy the material that person will use.

But government creates no wealth. Ignoring that plain and simple fact enables politicians to claim to be able to do all sorts of miraculous things that they cannot do in fact. Without creating wealth, how can they create jobs? By taking wealth from others, whether by taxation, selling bonds or imposing mandates.

However it is done, transferring wealth is not creating wealth. When government uses transferred wealth to hire people, it is essentially transferring jobs from the private sector, not adding to the net number of jobs in the economy.

If that was all that was involved, it would be a simple verbal fraud, with no gain of jobs and no net loss. In reality, many other things that politicians do reduce the number of jobs.

Politicians who mandate various benefits that employers must provide for workers gain politically by seeming to give people something for nothing. But making workers more expensive means that fewer are likely to be hired.

During an economic recovery, employers can respond to an increased demand for their companies' products by hiring more workers— creating more jobs— or they can work their existing employees overtime. Since workers have to be paid time-and-a-half for overtime, it might seem as if it would always be cheaper to hire more workers. But that was before politicians began mandating more benefits per worker.

When you get more hours of work from the existing employees, you don't need to pay for additional mandates, as you would have to when you get more hours of work by hiring new people. For many employers, that makes it cheaper to pay for overtime. The data show that overtime hours have been increasing in the economy while more people have been laid off.

There is another way of reducing the cost of government-imposed mandates.

That is by hiring temporary workers, to whom the mandates do not apply.

The number of temporary workers hired has increased for the fourth consecutive month, even though there are millions of unemployed people who could be hired for regular jobs, if it were not for the mandates that politicians have imposed.

Economists have long been saying that there is no free lunch, but politicians get elected by seeming to give free lunches, in one form or another. Yet there are no magic wands in Washington to make costs disappear, whether with workers or with medical care. We just pay in a different way, often a more costly way.

Nor can these costs all be simply dumped on "the rich," because there are just not enough of them. Often people who are far from rich pay the biggest price in lost opportunities. A classic example is the minimum wage law.

Minimum wage laws appear to give low-income workers something for nothing— and appearances are what count in politics. Realities can be left to others, so long as appearances get votes.

People with low skills or little experience usually get paid low wages. Passing a minimum wage law does not make them any more valuable. At a higher wage, it can just make them expendable. Raising the minimum wage in the midst of a recession was guaranteed to increase unemployment among the young— and it has.

None of this is peculiar to the current administration. The Roosevelt administration created huge numbers of government jobs during the 1930s— and yet unemployment remained in double digits throughout FDR's first two terms.

Constant government experiments with new bright ideas is another common feature of Obama's "change" and FDR's New Deal. The uncertainty that this unpredictable experimentation generates makes employers reluctant to hire. Destroying some jobs while creating other jobs does not get you very far, except politically. But politically is what matters to politicians, even if their policies needlessly prolong a recession or depression.

To find out more about Thomas Sowell and read features by other Creators Syndicate columnists and cartoonists, visit the Creators Syndicate web page at www.creators.com. Thomas Sowell is a senior fellow at the Hoover Institution, Stanford University, Stanford, CA 94305. His Web site is www.tsowell.com.

COPYRIGHT 2009 CREATORS.COM



Comments

2 Comments | Post Comment
Another fine article written by Mr. Sowell. The problem is no one in Washington reads logical articles anymore.
Comment: #1
Posted by: John C. Davidson
Tue Dec 8, 2009 3:23 PM
Dear Thomas Sowell, Excellent Article! I have written several articles, and have read other folks articles, about 'bringing manufacturing jobs back to America!' These hard-working Taxpayers were the "Heartbeat of America!" We don't need infrastructures, if we don't have textile and manufacturing jobs, as no one will be able to afford the high-dollar cars, let alone the gas and oil that makes them run, now do we? Politicians sold America out for their very deep pockets and this is corruption from anyone's point of view. We need to sell ninety-five percent of a one-way ticket to Gitmo, take all their assets to pay off the trillions they've borrowed without Taxpayers consent? Six decades later and America is bankrupt with these ‘corrupt, greedy, lying bunch of ‘blood-sucking ticks', still in office, still drawing big salaries and retirements, working on the same ‘programs/ healthcare' for years. They have nothing better to do to justify the bigs bucks they steal from Taxpayers, as it's obvious none of them know what they're doing nor care. This is why their favorite saying is “I'll check on this and get back to
you!” This brings another thought to Taxpayers minds, if the Insurance, Drug companies,Hospitals, and Medical professionals stop ‘paying the politicians to run for office, maybe the ‘Politicians License to Steal' will come to a screeching halt!

Politicians take billions from insurance, drug companies, healthcare professionals and what few
businesses are left. This is why Taxpayers can't afford insurance, hospitals, let alone medications.
Passing of Healthcare is another POWER GRAB and will finish bankrupting America. Fraud and
bankrupting of social security, medicare and medicaid should tells folks that government run
programs have never worked for Taxpayers, just for Politicians!

Insurance and Drug companies should give their insured, that's paid them big bucks for years, all
their money back. Folks, the Taxpayer that's paid $200.00 to $750.00 monthly, would be entitled to
several million for each person. Just think, we wouldn't need them at all! What fools we've been
letting these ‘blood-sucking ticks' tell us that ‘Taxpayers have to spread the wealth around!'
Where is politicians ‘wealth they're spreading around?'

IT'S TIME FOR AMERICANS TO OPEN THEIR EYES!
Comment: #2
Posted by: Shirley deLong
Sun Dec 13, 2009 11:59 AM
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