Reason Foundation

http://reason.org
http://reason.org/news/show/senate-dems-prepare-to-conjure-jobs

Reason Foundation

Senate Dems Prepare to Conjure Jobs, "Aid" the Middle Class

David Godow
January 18, 2011, 7:13pm

Senate Democrats' latest attempt to spur job growth, a grab bag of bills to be introduced as part of a so-called "competitiveness agenda", is set to be introduced early in February, according to the National Journal. From the Journal's weekly Congress update:

The competitiveness package, reflecting the influence of Sen. Chuck Schumer, D-N.Y., in his new role of Democratic Policy and Communications Committee chairman, will likely include a series of relatively discrete, targeted measures Democrats billed as aiding the middle class.
A bill comprised of proposals by Schumer, Majority Whip Dick Durbin, D-Ill., and former Sen.Byron Dorgan, D-N.D., that is intended to encourage corporations to avoid outsourcing manufacturing jobs, will likely be among populist trade-related measures included, according to leadership aides. Republicans and a handful of Democrats filibustered such a measure in September.

Interestingly, this bill would completely ignore the jobs bill passed by the House next month and may prove a difficult sell to emboldened Republicans. It will also be fascinating to see how efforts to punish corporations for hiring outside the country will go over during President Obama's February 7th visit to the U.S. Chamber of Commerce.

More than anything, it's depressing to think that the nascent recovery, which has just begun to create jobs in significant numbers, might be damaged by misguided and damaging policies that restrict the ability of business to grow.

That the bill might focus on artificially pumping up U.S. manufacturing employment is a bad sign in itself; it means that Dem Senators are focused on populist posturing rather than economic realities. The truth is that a lot of the jobs that disappeared during the recession are gone forever.

Nor is U.S. manufacturing output Manufacturing employment has dropped by almost 15 percent since December 2007, but output is only about 7 percent off its pre-recession peak and is on its way back up following its recessionary dip. Meanwhile, productivity is up by 10 percent since the beginning of 2009. In short, there's no evidence that the loss of employment in manufacturing sector will prove a long-term drag on output.

Indeed, while the recession did takes its toll on manufacturing jobs, employment in the sector has been on an almost unbroken decline since the 1980s (despite steady increases in output). In this context, any short-sighted efforts to squeeze a few jobs out of a sector that has been shrinking for decades reads more like a play to worried constituents than a shrewd economic stroke.

We don't yet know what the full bill will contain, but these tidbits don't provide much reason for enthusiasm. In any case, this issue will provide a perfect opportunity for Republicans to showcase their commitments to fiscal discipline in the face of any ill-advised, politically expedient attempts to stimulate employment.


David Godow is Research Assistant


Print This