Is There a Bigger Policy Issue than Jobs?

By Mike Koetting December 21, 2020

Today’s post had two inspirations—the “In the Weeds” podcast interview of economist Karl Smith and a YouTube video of a discussion between Van Jones and S.E. Culp hosted by David Axelrod at the University of Chicago Institute for Politics. The first was done just after the recent election and the latter is from early 2017.

In both discussions the issue of jobs was front and center. This isn’t surprising. In the broader human vista, how people work not only defines “the economy” but it defines the nature of the entire society. While it is possible to think about “non-work” activities in a society, we all realize that the economic realm so heavily dictates the terms of the rest of life that the difference is reflective rather than fundamental. What seems to be most fundamental is having—or not having—a job.

This is why discussions about “the economy” quickly become discussions about jobs. Jobs are deemed crucial because, in an instrumental sense, a job is a gateway to the sharing of society’s resources. But that’s tied to an overwhelming moral element. A job is how we decide who is contributing and who’s a slacker, who’s worthy and who isn’t. At some primordial level we still believe that doing the work of society is the most important part of participating in that society.

Thus, the more employment the better. While there are problems with this approach, at least for now, it is the centerpiece of economic, political and social thought. Moreover, whereas the idea is so fundamental and so wide-spread, it is a plausible place to look for common ground among the American people. The vast majority of everybody thinks more employment is a good thing. One of the substantive things Republicans liked most about Trump is that, prior to Covid, he stoked the economy to the lowest level of unemployment in 50 years, including the highest labor force participation rates in 15 years. Wages were even starting to grow. Caveats notwithstanding, this is something on the plus side of the ledger. Democrats need to think about how to replicate this success.

Biden’s team is oriented in this direction. Yellen, a labor economist by background, has always favored erring on the side of jobs versus inflation, and, presumably, deficits. Biden’s promises of focusing on creating jobs in and for Americans also sounds a chord that people can rally around. Covid both makes the job of creating jobs more formidable, but makes the need so great that it will be hard to resist the need to do something. As Jerome Powell, Chair of the Fed, observed: “We’re going to need to continue to provide support to this economy for quite a period of time.”

But is “doing something” a sufficient prescription? There are plenty of reasons to suspect just creating jobs is not in itself enough, but that we also need to think about what kind of jobs.

Historically, America has been content to leave the question of what jobs we want up to “the market”–specifically, to assume that left to their own devices, private industries will create the jobs where they make the most the sense. There are plenty of reasons to criticize some of the results of this approach. But it would be foolish to ignore the historic reality for America. Jobs got created, the overall wealth of the country increased, and the standard of living for just about everyone improved. This growth was not equally distributed and there were occasional dislocations with attendant pain for those caught up in them. But other demands rose and full-employment remained a goal, elusive perhaps, but not something beyond imagination. The country seemed prosperous, to itself and to the rest of the world.

Does this model still work? We shouldn’t rule it out cavalierly. Capitalism has been remarkably creative in its ability to create jobs. In the period immediately before Covid, jobs were being created at a rate that seemed to overcome what conventional economists were thinking of as structural limitations. So maybe the best thing, as Karl Smith advocates, is to simply throw all the macroeconomics tools into the fray and assume that will give us the best answer.

On the other hand, the magnitude of change in the world over the last 30 years has been so staggering, maybe now is a time to reflect. The fact that Malthus was wrong two hundred years ago, doesn’t give laissez-faire capitalism a free pass for all time. Incredible advances in computing and AI have eaten millions of middle level jobs and threaten millions more. A world-wide, interconnected economy has dramatically changed the labor market, adding 3 billion people who are seeking admission into the labor markets of advanced economies, a pursuit fueled by global communication networks that make the differences between their lives and lives in advanced economies abundantly clear. At the same time, increasing environmental concerns, particularly in advanced counties, create the immediate possibility that some economic activity is too dangerous to countenance.

Maybe these do not create as big a break from the past as it seems to me; it is easy to overweight things happening in the present.  But they should raise enough questions to use this opportunity to hedge our bets about the future and focus not just on jobs, but on jobs and systems of jobs that are more likely to be long term sustainable even in the face of technological expansion and growing environmental threats.

Unfortunately, we all know that once there are specific proposals about creating jobs, it will trigger partisan warfare. While virtually everyone supports the idea of creating more jobs, it is all too easy to imagine that any real-world proposal will encounter innumerable obstacles, particularly if it is explicit about where to create those jobs.

One could anticipate the likely points of contention and analyze them as if there were going to be a substantive discussion. But that seems unlikely. In fact, the fundamental reason for the obvious disconnect between a society-wide demand for more jobs and the presumed partisan warfare is that policy discussions must be routed through an existing party structure that is too brittle to accommodate what the country needs. Most members of Congress fear their own party’s local orthodoxy more than the other party. Consequently, they see their political survival more on the basis of the compromises they resist than the compromises they make. And to justify the compromise they don’t make. they have to thoroughly demonize the other party’s proposals instead of trying to find common ground.

All this removes many political discussions from the more fundamental issues facing our society. As Van Jones said: “Right now there is no politics that even allows you to have the right conversations.”

Somehow, we need to create space for those conversations. That is more important than any specific policy issue. Important as it is, such a complicated and nuanced discussion is unlikely to emerge because it’s not in any party’s interest to try to pick its way through this minefield. Thus, I am reduced to hoping that trying to find compromises around specific policies might open the door to such conversations. Jobs are a particularly fertile arena for such a discussion. The need is so undeniably pressing and, bottom line, there is great support for creating more jobs. For better and for worse, our society has made jobs the gateway to being a full-fledged member of society. In the absence of a different gateway, society has a moral obligation to think about this in an open and constructive way.

Whether people can get by their objections to this or that proposal and actually facilitate the creation (or maintenance) of jobs will depend on enough Congresspeople taking the principled position that the goal is to do what the county needs rather than extract partisan advantage. Maybe that’s unlikely, even impossible. But two weeks ago the Problem Solver Caucus resurrected the stimulus talks that would have been dead if it had been left up to party leaders. Maybe they could work some magic here. Who knows? Maybe it’s habit forming.

Author: mkbhhw

Mike Koetting’s career has been in health care policy and administration. But it has always been on the fringes of politics. His first job out of graduate school was conducting an evaluation of the Illinois Medicaid program for the Illinois Legislative Budget Office. In the following 40 years, he has been a health care provider, a researcher, a teacher, a regulator, a consultant and a payor. The biggest part of his career was 24 years as Vice President of Planning for the University of Chicago Medical Center. He retired from there in 2008, but in 2010 was asked to implement the ACA Medicaid expansion in Illinois, which kept him busy for another 5 years.

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