For all the talk – and dear Lord there’s been so much noise from the politicians – the economy basically comes down to people working and making money. If folks are not working, you can forget about companies making profits, about cities, states or even the federal government having any way to provide for the public welfare, not to mention all those things politicians promise every election. In the end, everything – and I mean everything is paid for by people who work. That’s why President Obama is starting to show stress in his speeches; he knows that “blame Bush” can only work so long, and as unemployment nationally creeps up to ten percent he’s headed for trouble. I’m sure he thought his “create or save” caveat for jobs was a clever way to make promises he could never be called on, but the fact is Obama’s plans don’t work, mostly because he does not understand the forces at work, and so he cannot hope to direct them to better results.
There are basically three kinds of jobs – necessary permanent jobs that need to be done by someone all the time, like firefighters, police, doctors and accountants; temporary needs that may or may not be filled long-term, like construction, retail, or manufacturing; and make-work assignments to fill one-time needs or give individuals something to do, like hiring an intern or paying your kid to wash your car. Government can create jobs, but only to a point, whether in number or duration. The most significant jobs, it must be understood, are not created by government or artifice, but by the economy’s needs and the community. The rise in unemployment happening now is the combination of hard-hit sectors shedding non-essential jobs (like real estate and automakers) and the large-scale reduction in unskilled labor. People get angry because they want their seniority to matter, but in the end the key question is whether your work is essential to your employer. Government cannot change that critical value.
The history of employment has always included changing times, as demographics and industries changed. After the Civil War in the United States, for example, many people moved to cities for work because they had lost too many young men to be able to work their farms effectively. Railroad workers, farmhands, cattlemen, surveyors, and even the Pony Express came to their end as they became obsolete. Those who could do so learned new skills and found new work in emerging industries, like automobile manufacturing and power generation in the early 20th Century. Other changes were more gradual and subtle, but no less significant, like the outsourcing of most customer service work and the use of contract labor for low-level clerical tasks. In every case, the change was in reaction to changing realities of life and business. While better-run businesses learned better how to adapt and anticipate change, in no case was the change directed or controlled by the government; strategic change is organic in nature and human actions are influenced by that change, not the other way around.
In the short term, government can create jobs, but that creation is limited by the degree of public support. The military, for example, is popular and large in wartime, but when the war ends (or public support for it) then the military contracts whether it wants to or not. Even FDR’s vaunted Civilian Conservation Corps had a relatively short life, due to its non-essential character. Job creation for the sake of job creation is by definition a failed effort even before it begins.