Mar 05 Wanted: Jobs in private sector

For the past few months, I’ve been looking for a job. It’s a long, arduous process, and sometimes I wonder what it would take for someone to hire me. They would have to pay me a salary, Social Security, unemployment insurance and perhaps health coverage and retirement benefits.

Where do they get this money? Because I can make them more profitable, or at least support them in their efforts to become more profitable. And if I can’t do that, no employer would hire me unless they wanted to lose money.

I’m not alone. About 6.3 million Americans have been unemployed for more than six months, up from 2.7 million a year ago. There’s talk of another jobs stimulus bill. But if government creates jobs for me, it needs to pay those things. Where does it get the money to do this?

Every time the government spends money to “create” a job, it takes money from someone. Government doesn’t produce and sell any good; it has to take money from somewhere and spend it.

Also, if you are going to say government created “net” jobs, you have to accept the unproven assumption the value of what government created was greater than what would have been created by the entity from which the government took the money.

We can perhaps determine “gross” job gains from stimulus spending. We cannot know net jobs. Government may be crowding out more private sector positions than it creates in the public sector. This is something for which both parties are responsible.

Even under Gov. Tim Pawlenty, state government grew substantially. Between January 2003 and January 2010, state government added 11,649 jobs in Minnesota, a 13.5 percent rise.

The private sector lost 31,378 or 1.4 percent the same period. Certainly much of this is the recession; private sector jobs grew until late 2007. But we do not know how many private sector jobs there would be without that rise in state government employment.

Maybe the first jobs stimulus created jobs. It might have created 1.5 million jobs, but it’s impossible to know. Another method of counting suggested only half a million. And a recent editorial in The Wall Street Journal by Harvard Professor Robert Barro suggested a loss of more than half a million.

Which of these is right? Between October 2008 and March 2009, many things were happening: TARP, auto bailouts, stimulus, health care reform, financial reform. Each of them probably contributed in some amount to at least not making things worse. But how much? We don’t know. All we know is 4 million jobs were lost in the nation, because that’s what data from employers tell us.

We know the St. Cloud area lost 2,000 jobs in 2009 out of about 100,000 jobs. Two percent of jobs were lost when usually we add 1 to 2 percent of jobs.

As the government crowds out private employment, there are hardly any private sector jobs left. And, I think it will only get worse. It’s a vicious circle of high debt, increased unemployment, reduced consumer demand, and more unemployment and debt.

We need a stronger economy and more private sector jobs. The only way to do this is to lower taxes and shift more power from government to the private citizen.

The 19th century French economist Frederic Bastiat once wrote that the difference between a good and bad economist is that “the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.” We are only talking about what we can count now. None of us seems to consider what private sector jobs we foresee to be lost.

What I foresee is many more days and months in my job search.

(This article appears in the March 5, 2010 edition of the St. Cloud Times.)