The video at the bottom of this post is utterly astounding. I have included it just to make sure you don’t think I’m making this stuff up.
Michael Steele, who is chairman of the Republican National Committee, tells us that “not in the history of mankind has the government ever created a job.”
WTF?
The federal government employs over 2,700,000 workers and hires hundreds of thousands each year to replace civil service workers that transfer to other federal government jobs, retire, or leave for other reasons. Average annual salary for full-time federal government jobs exceeds $67,000. The U.S. Government is the largest employer in the United States, hiring about 2.0 percent of the nation’s work force. Federal government jobs can be found in every state and large metropolitan area, including overseas in over 200 countries. The average annual federal workers compensation, pay plus benefits, is $106,871 compared to just $53,288 for the private sector according to the United States Bureau of Economic Analysis [bold added].
So 2.7 million people get up every day, drink some coffee and grab a bagel, hop on the subway or get in their cars, and then go to their jobs that don’t exist? How simply bizarre!
This next bit, however, is my favorite part. Steele says that he doesn’t like the stimulus package because it creates jobs that are temporary. Jobs created by government contracts, he says, aren’t real jobs, they’re just “work.” (What a fascinating distinction, Michael!) For example, Steele says “these road projects that we’re talking about have an end point.”
Yes. This is true.
Because, dumbass, all construction jobs are temporary and have an end point. Unless you’re building a stairway to heaven, your construction project will eventually end. While construction is going on, however, construction workers have jobs (or “work” if you prefer). Because Mr. Steele appears to be having a really hard time with this concept, we’ll explain it in simplest terms:
Imagine a construction project. Let’s say the government decides to spend money to put up a new building. Well, for a period of time, architects, engineers, project managers, carpenters, brick layers, pipefitters, plumbers, laborers, truck drivers, ironworkers, crane operators, sprinkler fitters, painters, and other people will be employed. Not unemployed. (Jobs!)
This is a good thing, you see. But there’s more to it. The government spending that creates this “temporary” project will be multiplied through the economy. This is called the demand multiplier effect. Those people working on the building will be making wages. You know – money. And they will save some of it. And they will spend some of it. They will buy lunch at the lunch cart, they will buy new work boots, they will have a beer after work, they will buy groceries, they will take their families out to dinner; maybe they will buy a car, or a boat, or perhaps they will renovate their kitchen. They can do these things because they have “work.” Therefore, the money spent on the construction project will not only effect the construction workers themselves, but also various other local businesses. And we didn’t even mention the other businesses that will benefit from this project, like the companies that supply all of the tools and building materials for this new building.
So government, in this case, has created jobs. And those jobs lead to wages, and to increased saving and spending – this is what we call “economic activity.” The result? The economy has been – pay close attention here – stimulated. The government will also see another kind of return on its investment, because the people employed on this job will pay income and payroll taxes.
Yes, Michael, eventually this project will “have an end point.” The building will be complete someday. That is the nature of construction.
So the government does create jobs, you see? It creates “government jobs,” but also other kinds of jobs. And when we are in a recession, and people are unemployed, they need jobs. Or “work,” if you prefer.