Friday, March 23, 2012
The Difficult Art of Job Creation
A.H. Raskin, who for four decades was the most highly respected labor reporter in American journalism, once wrote that he owed his job at The New York Times to the federal government.
In 1934 he was a correspondent for the Times, being paid by the story for articles on the City College of New York. The previous year, as part of the New Deal, Congress had passed the first wage and hour laws, establishing a 40-hour workweek and requiring overtime beyond that point.
Newspaper publishers — then, as now, skinflints to the bone — tried to argue that reporters should be exempt from the wage-hour laws because they were professionals who should earn a flat salary. The government agency in charge of enforcing the new law had a good laugh over that one and ordered the owners to pay hourly wages and overtime. To keep overtime down, most papers hired additional reporters, despite the Depression, and Raskin was one of the beneficiaries.
Imagine the hue and cry if President Obama and Congress tried to do something like that today. It would probably be denounced as the “job-killing wage and hour law,” even as it created jobs. It probably was so denounced back then, but history has kindly forgotten the losers of the argument.
It does make you wonder, though, what the government could do today to create jobs.
Doing nothing and leaving business alone to handle the job doesn’t seem to work. It can in boom times, but in today’s situation, where the problem is not enough customers, owing to unemployment, bankruptcy, and people paying off debt, some stimulus (if conservatives will pardon the expression) is in order.
An obvious approach would be a major public works program, aimed at improving roads, bridges, schools and public buildings. With the housing and construction businesses in a true depression, this would create jobs utilizing the skills already possessed by many unemployed workers. The downside is that we have become so frightened of our deficit shadow that the will to do this is nonexistent.
Cutting the work week to 35 hours is another possibility. It was done in France a decade ago and proved hugely popular with the public, though the jury is still out on the overall economic impact. Cutting hours worked in Raskin’s day; why not try it now?
Or how about repealing President Obama’s health care law and replacing it with a national health service. The bureaucracy’s already in place; all you’d have to do is extend Medicare to everybody and hire a few more people to process the claims (more jobs!).
This last one has several virtues. From a free-market perspective, it relieves businesses of the necessity of maintaining a benefits bureaucracy and dealing with the uncertainties of health care costs. The high cost of benefits surely discourages employers from hiring new people, so why not make it the government’s problem?
Because that would be “socialism,” that’s why.
It all calls to mind the story of the United Auto Workers and the big automakers right after World War II. Walter Reuther, head of the UAW, wanted a national health care plan to protect every American from devastating medical expenses. The automakers were horrified and cried socialism; they said they’d rather provide for their own workers and negotiated a contract by which they did. As a consequence of that decision, Detroit, half a century later, was spending more money on employee health benefits than it was on steel.
Which just goes to show that sometimes (a lot of times, actually) business doesn’t even know what’s in its best interest.