Economic woes solving plan: Government hires everyone

Great Debates
41

Let’s face it, there will always be a certain number of people out of work. At a certain level though, that number can exist in a healthy economy. A “good” unemployment, as we had a few years ago, hovers around 5%, which is 7.6 million people. We had a good economy with 7.6 million people out of work, and I’m sure if we looked at the U6 at the time, it would have been millions more. That’s why I kind of settled on 12.5 million after initially speculating that the job market could be expanded by 15 million to eliminate all unemployment. I think the numbers still work as I’ve stated them, because if we did get these 12.5 million into jobs, then the economy should default to what it was before, which was at least 7.6 million unemployed according to the U3 of that time and millions more by the U6 measurement. So I’m not too concerned about these numbers you’re proposing

I don’t think it will be that much of a difference. According to a study from Northeastern University(PDF), from 2007-2009, 4.6 unemployment to 9.6, the labor market only rose by a paltry 1.05 million. If you are worried that my plan to eliminate unemployment will simply reduce the amount of people working while more people swarm to find a job and keep unemployment level, then I would say history doesn’t bear that out. Plus, you are mixing 2 stats, percentage of unemployment and net total of unemployed. If 12.5 million peopl get jobs and others rush in to look for jobs in their place, we may have high unemployment due to the increase in the labor force, but we would still, at the end of the day, have 12.5 million more people working. At that point, unemployment would have less impact so that even if we were to remain at 9.2%, the affect on the economy would be as if we had half of that

I appreciate your research into this, but I think you overlooked one major flaw in your argument. My plan was to offer up a net of 12.5 million jobs. I reached that number by looking at how many unemployed there were and the unemployment rate and setting a goal of getting it back to a point where the unemployment rate matched a time when the country was more prosperous. So in other words, I’m not here to give out jobs in perpetuality, I only want to give out 12.5 million jobs. If millions of people, including those that would make more money, try to get these jobs, 2 things will happen:

One, not all of them will get those jobs, so they will remain employed with their current employers. And two, the ones who left their jobs for higher paying ones will have created new job opportunities for those who did not get one of the 12.5 million jobs. In one of the previous posts, I spoke too quickly and said that it wouldn’t matter if people quit because then Walmart would just have to pay people more. I neglected to realize at the time that Walmart won’t have to because there will be plenty of people still looking for jobs (7.6 million in a good economy still) that will find these jobs given up by those who got one of the higher paying 12.5 million I offered. There is no danger of mass quitting and I am not essentially making minimum wage $50k (12.5 million is hardly the entire labor force). There will still be jobs available in the private sector for those who want them. Therefore, the nightmare scenario you envisioned where a $35K job would mean over a hundred million people quitting their current jobs will not happen

So to answer your question, what if 20-40 additional people show up looking for jobs? Since the majority of them will be people already employed, I’ll tell them to go back to their regular jobs

42

It won’t be 50k per damned person, it will more likely be minimum wage, an insurance plan and perhaps some sort of minimal cost of living raise - think military wages, not uberleet stupid company wages.

Stop being silly. People on unemployment or no benefits at all will troop to minimum wage jobs especially if there is an insurance plan and some vague promise of 40 hours a week.

43

Current federal minimum wage is $7.25, at 2000 hours per year that’s only $14,500 which is about what the poverty level is for a single adult. But the poverty line for a family is about $22k per year.

Starting pay in the military is just under $30k per year, that would be about $15 per hour. Hence my joke about expanding the military by about 12-20million people.

So which is it, $15k or $30k?

Lastly, we asked at the beginning about the benefits package, and it seems there will be health insurance, which costs any where from $1000 to $6000 per person per year. Probably more since it will attract those that really need it (ie the sick). Will there also be a guaranteed pension?

If you are planning to offer free health insurance you’re right that you’ll get lots of people signed up, probably the 50million uninsured. Are you also planning to cover spouses and children? Will their be a co-pay? Vision, dental? I’m hoping chiropractic will be covered at 100% because I plan to go a lot.

44

[QUOTE=aruvqan]
t won’t be 50k per damned person, it will more likely be minimum wage, an insurance plan and perhaps some sort of minimal cost of living raise - think military wages, not uberleet stupid company wages.
[/QUOTE]

Seriously man…have you read the thread? Have you read the OP?? If the government hires everyone who is unemployed and who wants a job and pays them $X/year, why do you suppose anyone would work at a job for something less than X?? The OP wants to make everyone who is unemployed a federal worker for the gods sake! That means not only higher wages but benefits that most Walmart workers ('Walmart standing for any job that isn’t that of a Federal employee) don’t get currently. Even if you just paid all these millions and millions of workers minimum wage, just by them being federal workers they would get medical, dental, retirement and all the other benefits that accrue from being such a worker…which means that Walmart et al would have to pay more to get workers in the future.

How hard is that to understand within the context of THIS THREAD??

Sure, if you also promise them benefits and everything else that would come with being a Federal worker. Of course, I’m not actually sure how many (or if) slots for minimum wage workers are even available for federal employees, but I guess you could just wave that aside.

What will you do if your program only draws in a quarter of all the folks on unemployment today however? After all, not everyone is willing to work at minimum wage even with benefits and job security. You are going to have a tough time (under the current system) of hiring new federal employees who have, say, degrees or years of experience in certain categories for minimum wage…are you going to allow people to use their experience and skills to get better wages, or are you just going to say ‘all the millions of jobs available are only for minimum wage…take them or’…or what? Starve? Or are you going to still pay unemployment?

-XT

45

Google “devaluation” and “hyperinflation”.

I don’t have the time nor the inclination to give you a basic lesson in macroeconomics.

46

Yog,

There are certainly economic activities the State should undertake. The provision of public goods (non-rival, non-excludable) among them.

The State should make sure that there is not a liquidity trap by ensuring that inflation is of a few percentage points.

However, you specifically prescribe that the State should hire everyone who is unemployed.

Is there anything which leads you to believe that workers would have an incentive to allocate their labor where its utility is greater than its opportunity cost?

How would the prices paid for labor signal relative scarcity of the different types of labor?

Do you believe that State-planned prices can signal relative scarcity to the same level of precision and speed as the prices which are formed by supply and demand?

There are things the State can do in a recession. This is among the worst of them.

47

[QUOTE=YogSosoth]
So what’s the problem? People quit the private section to go work for the government is bad? Remember, I’m liberal, so I don’t see an issue there. Walmart will just have to have higher wages. Sucks for them, but when wages are high enough, then you’ll have some people quitting government to work for the now suddenly high-paying Walmart jobs
[/QUOTE]

The problem, aside from the one you still haven’t solved (namely…how will you pay for this all, especially if now we are talking about MORE than the original 12.5 million people) is that it doesn’t suck to be Walmart…they will just raise prices if their labor costs go up. See, EVERYONE’S labor costs will go up with your marvelous plan. Yeah…it’s a liberals wet dream, I know, I know (oooohooohooo!). That means that prices go up across the board. If you are going to pay your new millions of federal workers $30k/year, or $40k/year or whatever, that’s going to be the new baseline (with benefits…don’t forget the benefits, though you seem to want to forget them). Since everyone will be able to get a job in your program, why would they work for less somewhere else? Answer…they won’t. So, bag boys at Safeway will be asking for $Xk/year with benefits (where X=whatever arbitrary average salary you finally decide you are going to pay all these folks) or they won’t take the jobs. Strippers and waitresses will ask for $Xk/year with benefits or they won’t take the jobs. Custodians and trash collectors will ask for $Xk/year with benefits or they won’t take the jobs. Heck…most people will be wanting MORE to do those jobs, unless you plan to give your millions of new federal workers really nasty jobs to do and just expect them to do them.

So…that means that every single thing you buy will go up in price. By quite a bit since you are talking about more than doubling labor costs (heck, tripling it or quadrupling it or more in many cases). It doesn’t suck to be Walmart…it sucks to be the poor fools who not only have to pay the crushing taxes you would need to make this fantasy work but for the poor fools who would have to pay increased costs for every single thing they buy or service they use. And it would suck to be you, when all those angry Americans figure out it was your brilliant plan that ended up costing everyone so much. :stuck_out_tongue:

-XT

48

The government does not need to hire everybody. But we have an infrastructure mess that is screaming to be fixed. We should go hard to bring ours up to date.
It would employ people doing honest work that needs to be done. There would be a lot more than just those jobs created. It would give a boost to demand and lots of jobs would be created. It has to be done sooner or later. I suggest sooner.

49

Ok, obviously many of you posted after my last post, or series of posts. You guys asked some serious questions and I appreciate that. But I believe my last post or series of posts addresses a main concern a lot of you have, and that is the problem of people quitting their current jobs for these brand spanking new $50k a year government jobs.

Before you guys assume anything of that, a few clarifications:

I am NOT essentially making minimum wage $50k a year. MichaelEmouse is incorrect that I said I would hire “everyone”. I know that’s what my thread’s title is, but look closely and you’ll see I’ve settled on a figure of 12.5, explained by my first post why its that specific number. Creating that many new $50k a year jobs is not enough to eliminate all jobs under $50k a year, so I’m doing nothing of the sort regarding minimum wage that people are accusing me of

Second, I spoke in haste when I talked about Walmart with xtisme. In reality, things will not be so bleak as to have millions quitting their current jobs and creating a job vacuum. The reason is that those who have quit will still find only 12.5 million jobs. Once those are taken, there will still exist the jobs that these people quit over. This plan will not create a severe labor shortage any more than what we had when unemployment was 4.6% back in 2007. All the people who quit will open up existing job opportunities. We will not have a scenario in which an estimated 100 million people quit because there will only be exactly 12.5 million new jobs. Plus, it is easy to simply create this plan with the caveat that if you quit your job a month or 2 before it goes into effect, you are ineligible. These jobs are for the people who have been out of work long term due to the recession

Lastly, I seriously question why having the same number of jobs as we did a mere 4 years ago will lead to hyperinflation or monetary ruin. It won’t. We are trying to turn back the clock to a year when the country was prosperous. The conditions can exist where 12.5 million more people are employed and the country’s economy chugs along. Only the difference this time is that these 12.5 million people will be government workers instead of working in the private sector. With the unique characteristic of governments to operate on a deficit for years, decades even, we can artificially keep inflation under control without fear of the “company”, in this case the government, going backrupt.

50

The difference is that when the 12.5M people were working in the private sector, they were creating wealth. When they are working for the government, they are… doing what? Unless they are doing things that actually need to be done, then they are consuming wealth.

If you want to make an argument that the government needs to hire more people in order to improve the infrastructure or do other things that only the government can do, fine. That’s an argument that can be made. But saying you’re going to hire an arbitrary number of people to do undefined things is just a giant welfare program. Better to just give them the cash and avoid all the overhead that would come with hiring them.

51

I’m not knee-jerk anti-left but I have to say I think this is a poor plan.

I don’t see the cost in taxes and other problems justifying the benefits of keeping a few million people artificially employed.

52

There’s no reason to assume just because they’re in government that they don’t create wealth, or serve some need that cannot or will not be met by the private industry. Government can create wealth, they just don’t typically do because that’s not their job. There’s no reason government can’t run stores and manufacture and sell goods

Therein lies another problem created and maintained by those of a conservative bent. They’ll cry that any intrusion into private industry by government is too much, even if it means solving our nation’s financial woes. I’d like to see the government create a big all-in-one market such as Walmart. They don’t have to drive them out of business, but they can be competitive. Hell, the Governmart can sell everything for a dollar more than Walmart, thus ensuring that there’s always a lower alternative but still within a close enough margin to be profitable.

The reason why I picked Walmart is because its a huge company. It can afford to lose some customers. Focus on Exxon-Mobile, Microsoft, Apple, GE, Ford, McDonalds and create competing companies run by the government to offer similar items. Give people a choice and price it so that it is just a little bit more, but not too much, than the private industry alternatives. That way, enough consumers may migrate over to Governmart to ensure both stay competitive, while still creating wealth. Only conservative inertia prevents that from being a viable option

Why does the Post Office continue to exist in a world with Fed-Ex, UPS, email, texting, Twitter, and Facebook? Its not socialist apparently if its always existed, but the objections to the above paragraph would be equally unfounded if they used it against the post office instead of Governmart: government providing some services that competes with private industry is ok and healthy.

Besides, like I’ve said before, anytime you complain that government’s too slow, or too unhelpful is there a need can be filled with these 12.5 million people. There might not be 12.5 million positions for those people, but like in the DMV example, there are plenty of areas any one of us can name where it takes forever for government to move. With more staff, such concerns are eliminated.

Also, use your imagination. Government set aside a minority or a majority of these new 12.5 million jobs to specifically create wealth. Fund entrepreneurs, fund new industries, finally make the whole green initiative worthwhile by staffing them and 100% funding them. You are afraid government can’t create wealth? Build new factories and invest in new technology where government gets a cut of the profits, while using its power as the government to prevent the company from going bankrupt on a few stupid decisions. Hell, even help fund existing companies. If Apple needs labor to manufacture its next generation iPads, hire 10000 from the government. Conservatives always like to complain about unions right? What if GM or Chrysler hire lower waged workers from government rosters instead of more expensive ones from the UAW? Republicans hate unions anyways, so this is a win-win: people get jobs, and the auto-industry gets lower waged workers

53

You still haven’t shown how people would have an incentive to allocate their labor/capital/land where its utility is above its opportunity cost.

To take the example of “green initiative worthwhile by staffing them and 100% funding them”, if you do that, you give an incentive to entrepreneurs to undertake economic activities even if their marginal gain is below their marginal cost.

The gov’t can create wealth in that it can create useful goods. The Soviet union’s economy could do that. The crucial question is whether economic actors have an incentive to allocate their labor/capital/land where its utility is greater than its opportunity cost.

54

Yes, choosing people that aren’t qualified is a great way to solve economic troubles. :smack: You are assuming that every single person is going to somehow contribute to the economy rather than hurt the economy. Isn’t that how we got into trouble in the first place?

55

Wasn’t this plan part of the movie “Dave”?

56

I really don’t know how best to respond to your shotgun style of posting, but I will do my best.

Did you miss the point where I said that if you need to hire people to do essential government jobs that’s an argument that can be made? But you start with the need, not the idea that you just hire someone.

If you want the government to run stores, then propose that. Put forth a business plan and how they are going to be competitive with the existing businesses.

As for the Post Office, the reason they continue to exist is because the are granted a certain government monopoly. If you don’t know even that basic detail about government vs private sector operations, you shouldn’t be making proposals about how to revamp our economy.

Emphasis added.

So, that’s why the Post Office continues to exist.

57

The infrastructure needs to be done. The workers would create demand. That is a driving force for the economy.
Do you really not understand government workers are doing necessary and important work?

58

You’re right. I should have said something like:

“If you want to make an argument that the government needs to hire more people in order to improve the infrastructure or do other things that only the government can do, fine. That’s an argument that can be made.”

Oh wait. I did.

59

Bullshit. The delivery companies picked off the profitable parts of the post office leaving letter carrying, a service that does not make a bunch of money, to the public sector. If there was money to be made delivering letters, the corporations would have forced legislation through.

60

The issue isn’t that government workers don’t do important work. The issue is that there is a wide variety of different jobs that need doing and a single centralized entity can’t effectively determine how that work should be allocated for the entire economy. How does the government know how many people should be working on roads instead of building cars? You end up with something like Stalin’s Soviet Union where they have the prettiest railroad stations in the world and half the people are starving.
I feel like people don’t understand the basic concept that the economy adjusts as various inputs change. To take a logically absurd example, why can’t the government just demand that everyone gets paid $100,000 a year? Two reasons. First of all, most people are not creating $100,000 in value. And second of all, the buying power of $100,000 would drop as prices rise in order to meet the increased demand.