Tag Archives: jobs

Beyond the Bumper Stickers

“It’s more complicated than that” is a sentence I probably mutter in my sleep. (My students  think I repeat it on a daily basis, sort of like a mantra.)

In a New York Times op-ed a couple of weeks ago, Miriam Sapiro, who was a deputy U.S. trade representative from 2009 to 2014, addressed one of the many subjects that is more complicated than either free-trade purists or knee-jerk opponents of markets understand, in “What Trump and Sanders Get Wrong About Free Trade.”

After noting that the United States enjoys a 200 billion dollar trade surplus, she points out that unless we continue working to pry open foreign markets for American goods and services, we will have a hard time creating more jobs: Nearly all of the world’s population lives outside our borders.

The Department of Commerce estimates that every increase of $1 billion in exports sustains nearly 6,000 jobs, and that export-related jobs pay on average 18 percent more than jobs focused on the domestic market.

We Americans have an unfortunate tendency toward “either/or” arguments. Trade is good or bad. We are for it or against it. But this is one of those areas in which the question is not–or should not be–yes or no, but how. What distinguishes a good trade agreement from a bad one? How do we ensure an equal playing field? If domestic manufacturers have to abide by rules protecting the environment and ensuring fair labor practices, for example, other parties to these agreements should be bound by similar constraints. All trade agreements are not equal.

And we need to recognize that there are multiple causes of our economic problems.

Rather than blaming international trade for economic woes, we need to have an honest conversation about what the United States must do to strengthen its economy. More than 20 percent of American children today live in poverty. Our educational system, once the envy of the world, now ranks in the bottom half of much of the developed world. The tax system rewards companies that exploit loopholes, infrastructure is crumbling and training programs lack the kind of apprenticeship and credentialing opportunities that Germany and other major economies offer…
Of course it is easier to score points by denouncing trade than to tackle the tough issues, but such demagogy ignores the roots of economic insecurity and inequality.

It’s handy to have a villain to identify, but the emotional satisfaction of identifying someone or some thing as the “bad guy” rarely translates into a solution to the problem at hand.

It is also a mistake to think that positions on trade policy break down along neat party lines. As we learn from Political Animal, 

U.S. Conference of Mayors (which is overwhelmingly Democratic), endorsed TPP. The reason, as Ron Brownstein pointed out, is clear.

New data released May 13 by the Brookings Institution’s Metropolitan Policy Program helps explain the mayors’ tilt toward trade…Brookings found that fully 86 percent of U.S. exports now originate from urban areas. Moreover, exports drove more than one-quarter of all metro area economic growth from 2009-2014.

I think it was H.L. Mencken who said “For every complex problem there is an answer that is clear, simple, and wrong.”

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There are Jobs and Then There are Jobs

I remember admonishing my then teenage sons that “any job is worthwhile.” But the summer jobs we were discussing were highly unlikely to be permanent.

Things are a bit different for the adult working poor in the Great State of Indiana.

When our Governor or Mayor announces that–thanks to his mighty economic development prowess–Indiana or Indianapolis will be the site of X new jobs, everyone applauds. The media dutifully reports that jobs are being created (or stolen from elsewhere). If the story mentions the average salaries those jobs will generate, it’s toward the end.

There’s a reason for that.

Derek Thomas (full disclosure, a former student of mine) is an analyst for and blogger with the Indiana Institute for Working Families. His most recent blog demonstrates why we need to pay attention to the quality of jobs, and not simply the quantity.

We reported last year that as of 2011, Indiana had a higher percent of jobs in occupations with poverty-level wages than all neighboring states, the Midwestern average and the U.S. average, and that job growth was largely concentrated in low-wage work. New analysis shows that among neighboring states, Kentucky took the 2012 title back by a slim margin. However, Indiana still holds the dubious distinction of having the largest percent growth in occupations with poverty-level wages over the past three years – nearly 12% from 2010 – 2012. Additionally, the percent of jobs in occupations with median annual pay less than twice the poverty threshold is up from 71% to 72.1% – of neighboring states, only Kentucky has more (slightly).

Translation: even when we get new jobs, they aren’t good jobs. The people who fill them aren’t going to fill Hoosier tax coffers, they aren’t going to have disposable income to spend in Hoosier stores, and some percentage of them will have to rely upon social welfare services funded by our tax dollars. (But they’ll have the “right” to work.)

Well, we were recently ranked as the 8th dumbest state.

Honest to goodness, Indiana…

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It’s a Lose-Lose

We all know about “win-win” situations. My husband recently pointed me to an article that epitomizes its opposite: a true “lose-lose.”

Google, Microsoft, Facebook and other silicon valley companies are heavily lobbying Congress to expand visas for foreign tech workers.

Over the objections of labour groups, these companies and their allies, including banks, IBM, Pfizer, and General Electric, have persuaded the US Senate to increase the yearly H-1B visas from 65,000 to 110,000, and as high as 300,000 under certain conditions. Foreign workers trained in science, technology and engineering are preferred to their US counterparts because, in the words of economist Ross Eisenbrey of the Economic Policy Institute, they are indentured “people who could not switch employers to improve their wages or working conditions…. Too many are paid at wages below the average for their occupation and location: over half of all H-1B guest workers [there are already 500,000 such workers] are certified for wages in the bottom quarter of the wage scale”.

Of course, bringing more workers from abroad reduces the opportunities available to America’s young scientists and engineers, many of whom, according to the article, are ” trying to find jobs commensurate with their skills.” Right now, out of the nine million Americans who have degrees in a science, technology, engineering or math (STEM) field, only three million have a job in their speciality.

Narrowing the job market for young Americans is one “lose.” The other is the brain drain on the countries from which we are importing talent.

 While the US Agency for International Development (USAID) is stressing the need for developing countries to build up their “human capital”, back in the US, the corporate powers-that-be and their political allies are undermining this tenet of US foreign economic policy.

If “human capital” means anything in the poorer areas of Africa, South America and Asia, it means civil engineers, scientists, physicians, nurses, computer and communications specialists, logistical experts, architects and entrepreneurs. They all are in short supply in these regions that have already lost so many skilled people to the West.

So let me see if I have this right: Congress has acted to reduce the options available to American young people at the same time government agencies have been encouraging them to major in STEM disciplines, in order to steal needed human capital from poor countries that desperately need to keep that talent.

In a perfect world–at least my perfect world–a more equal global economy would be characterized by open borders like those in the EU, and young people would be free to take their talents wherever they wanted. We don’t have that world, however, and this cynical policy sure won’t usher it in.

Do any of the people we elect to Congress think about what they’re doing?

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It All Depends on What Your Definition of “Job” is….

I’m getting tired of politicians piously declaiming that “government can’t create jobs.” (That statement is generally followed by that candidate’s jobs plan. Irony, anyone?)

The truth is that even if you reject the notion that public policy can create an atmosphere that facilitates job creation, government is a huge employer. Almost one of every five American workers is employed in the public sector – working in our schools, colleges, universities, police and fire departments, and providing many other vital public services. One of the biggest drags on employment since the start of the Great Recession–one of the reasons that job creation has not been more robust–is that state and local governments have laid off so many of those public sector workers. Such job growth as has occurred has been almost entirely in the private sector .

Those public sector jobs (we used to call them “public service” jobs) have become a handy target for ideologues who rant about bloated government and overpaid public sector workers, but the inconvenient truth is that modern society requires educators and police officers and people who work at the BMV. When their ranks get too thin, we complain about government inefficiency, or insufficient public safety, or classrooms that are too large.

A modern, complex society requires an agency that monitors the environment, that oversees food and drug quality (more meningitis, anyone?) and performs numerous other tasks that individuals in urban environments cannot do individually. Unfortunately, we still need soldiers. All these people may be bloated bureaucrats in the public imagination, but when that schoolteacher or firefighter is furloughed, we are suddenly faced with reality.

Of course, even the politicians who are fond of declaiming that government can’t create jobs betray their hypocrisy by accusing “big government” of killing jobs with taxes and regulation. Their claim–implicit and explicit–is that lower taxes and less regulation will foster job growth. But when tax cuts imperil our ability to provide essential services, jobs go elsewhere. When we go too far with deregulation, we get more instances like the recent deaths from meningitis.

I know it isn’t as satisfying as making sweeping proclamations about the evils of government and the glories of the private sector, but we need to admit that modern life is complicated. We need the right levels of taxes, the proper regulation. Those things need to be carefully calibrated to achieve our goals, not subjected to simple-minded “either-or” formulations.

And we need to laugh out loud the next time a political figure says that government doesn’t create jobs.

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A Bigger Pie

I think it was Mark Twain who said “It isn’t what you don’t know that hurts you–it’s what you know for certain that just ain’t so.”

Political debate these days is awash with “facts” that “just ain’t so.” One of those “facts” is that immigrants take jobs from Americans, and that raising the number of foreign-born people we allow to enter the country legally each year would worsen unemployment. A recent study by the Fiscal Policy Institute tells a very different story.

The Institute looked at incorporation figures and determined that immigrants own 18% of all small businesses in the U.S. In other words, more than one in six small businesses is owned by an immigrant. Those businesses employ an estimated 4.7 million workers, and generate some $776 billion dollars in revenue.

That immigrants gravitate to ownership shouldn’t surprise us. You have to be a risk taker to leave the place of your birth and move to a foreign country. Anti-immigrant attitudes make it more difficult for educated and skilled immigrants to find management and professional positions with American-owned firms. So, disproportionately, immigrants start their own small businesses, and small businesses are far and away the largest generators of employment. Small businesses–not massive corporations–are the real “job creators.”

The notion that immigration slows job growth is rooted in a “zero sum” worldview, the belief that the economy is like a pie. In that view, there is a fixed amount of pie, and if you get a bigger slice, mine will be smaller–if an immigrant gets a job, that’s one job fewer for Americans.

The virtue of capitalism is that it encourages people to bake more pie. And that is precisely what immigrants are doing.

Somehow, I doubt that this evidence will make much difference to those who want to raise the gangplank and keep those “others” out. What we know that “just ain’t so” keeps getting in the way of acting in our own best interests.

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