Recreating Jobs in Today's Economy

Feb 21, 2004

Having gone on at length about what economic measures are unlikely to work and why, what could the government do to create jobs? To start, let's look back at the Bush plan to legalize all of the undocumented non-citizen workers and keep them around to provide cheap labor, and turn it around the other way. What if we had an amnesty to give the workers time to wrap up their business in this country, pack or sell their possessions, and return home. After the amnesty if a worker was caught it would result in a trip home with minimal paperwork. And combine that with some serious fines for businesses who hire undocumented workers to encourage good behavior.

George Bush says that Americans don't want those jobs, but I suspect that while some jobs might go unfilled, faced with the choice of paying a fair wage to a legal worker or doing leaving the job undone, the businesses would pay enough to attract workers. Legal American workers. Tax paying workers.

Conservatives will tell you that jobs would vanish if workers cost more, which would actually be rare, because very few businesses are hiring any workers they don't need. Will some of the increased cost be passed on to consumers? Of course, it always has. And I'm sure a few businesses which are on the brink of failure will fail a little sooner if they pay a real wage, but somehow I can't see business failure or job elimination affecting more than a fraction of the jobs being done by undocumented workers now.

Unlike the people who have been getting most of the recent tax cuts, the people doing the low skill jobs are not going to invest the money they earn. They are going to spend it, on food, clothes, a slightly better rusted-out old car, and a better TV. In other words, consumer goods. That money is going to go back in the economy to create other jobs, probably in manufacturing and services.

The next step is raising the minimum wage It's important to get a better balance between the cost of living and the minimum wage, so that a worker making minimum wage can live at the poverty level for a family of two. That allows one family member to be a stay at home parent full or part time, and hopefully take a few people out of the job market by choice, leaving jobs for the totally unemployed. If the administration wants to keep families together, being able to live with dignity would help, and might keep the crime rate falling as well.

The final step to job creation is to let the interest rate rise. There are many people who are at an age to retire, but their investments just aren't returning enough to make it possible. And give interest on CDs the same tax break as dividends, CDs are the investment of the working class.

Tax cuts haven't worked. We have gone from a balanced budget, low unemployment and high stock market to the largest deficit in history, two million lost jobs, and a stock market which is best described as "not as bad as it was." When you find yourself in a hole, stop digging!