With national unemployment rates hovering just below 10%, it’s hard to blame them; hard-working citizens and voters have been laid off in droves as the country’s supply of loanable funds collapsed, shrinking not only demand for goods, but also the ability of businesses to expand on credit and continue to hire employees.
Numerous solutions to this problem have been proposed, ranging from tax cuts to expanding the money supply to using government funds to create new jobs for unemployed workers, all of which have been pursued to some extent.
But where do jobs really come from, and how do we as a society really reduce poverty?
Theoretically, the government could print enough money to employ 100% of the workforce in some capacity or another, but this does not mean that we as a nation would be any better off than before. Sure, everyone would receive a paycheck and have a job to go to in the morning (perhaps building another infamous “bridge to nowhere”), but the actual amount of wealth produced and divided up by society would not necessarily increase.
In other words, all we get is inflation: everyone would have plenty of money, but the quantity of basic necessities available for purchase would remain unchanged. Poverty is in fact reduced when a society employs people in useful positions that are able to raise the standard of living and efficiency of all those around them.
Through educated workers, better technology, and specialization, we are able to create more with less, making it easier to obtain basic amenities like food, clean water, and proper shelter. This in turn frees up time and labor for everyone; a carpenter who can turn on his kitchen tap can build more homes than one who has to spend time and effort drawing water from a well every day.
As humans became better and better at providing for themselves, however, the ability for us to specialize and be productive in different fields began to increase. At least in the long run, these increases in productivity are what bring gainful employment to a community.
The current focus on employment is certainly an important consideration, particularly in the short run, but long term considerations need to address the root of society’s issues with poverty, not just outward appearances. Military spending can be a particularly pernicious source of jobs specifically because its benefits are so hard to measure and its propensity for expansion are limitless.
To be sure, national defense is a valuable commodity that directly contributes to the well-being of a nation; in many ways it is the very basis of government that preserves the integrity of the rest of the system. At the same time, however, it is never immediately obvious how much military is enough.
Particularly in an arms race, infinite quantities of labor and resources can go into producing new and better weapons without actually improving anyone’s quality of life; hence the past SALT I and II ballistic missile bans between the U.S. and the Soviet Union that prevented the two nations from going broke trying to out gun one another.
Again, these weapons projects would have employed plenty of people, but would have done little to actually ease the overall community’s economic problems.
Politicians continue to trumpet the merits of similarly wasteful projects based purely on job creation, however. During the recent federal debate over $1.75 billion in additional funding for the F-22 “Raptor” fighter jet, Hawaii Sen. Dan Inouye did not even bother to defend the project based on its dubious defense merits, but rather on the basis of Sen. Dodd’s assertion that the project would create “at least 25,000 direct jobs” across the nation.
Such thinking begs the question, however, as to whether or not these jobs actually reduce poverty by increasing our society’s overall wealth, or simply further divide already scarce resources to produce something that gives no real net benefit in wealth.
Ultimately, voters as a group should be wary of politicians promising jobs out of thin air: employment is important, but in the end only truly useful productivity can ease our country’s economic burdens.
DAVID JARESS is an intern with the Grassroot Institute of Hawaii