So Barack Obama has pledged to spend up to $700 billion creating 2.5 million jobs in the biggest public works construction program for more than 50 years. The question is will it work?
It will undoubtedly create more jobs, and perhaps stimulate spending. But how much?
Bill Clinton's Secretary of Labor Robert Reich suggest we probably need a lot more than public works. In his blog, he asks whether we should get real and call it a depression. "When FDR took office in 1933, one out of four American workers was jobless. We're not there yet, but we're trending in that direction. Consumers will tighten their belts even further. Even if they have a full-time job, they're witnessing these job losses or hourly declines all around them and wondering if their job could be next on the chopping block. Their indebtedness is still high, by historic standards. And many are worried as well about their mortgage payments. So consumer spending is also falling off a cliff."
More to the point, he says any stimulus package needs to be broad. "It should be focused on job creation in the United States – infrastructure projects as well as services. Construction jobs are critical but so are elder care, hospital, child care, welfare, and countless other services that are getting clobbered. Service businesses accounted for two-thirds of the job cuts in November, meaning that the weakness in labor markets has shifted from the goods-producing sector of the economy to the far larger services sector."
Columnist Rick Moran says Obama's approach is old school, very much like a prescription straight out of the Depression, and one that's not suited for today. "What exactly will these millions of workers be doing? Apparently, they will be doing some much needed infrastructure work. No one denies that roads and bridges need attention – although if anyone bothered to look at the Highway Bill they would see most of those problems attempting to be a addressed. But what kind of "work" are we talking about? Are we to expect stock brokers or just about any American who has lost their job to take up a pick and shovel and start doing manual labor? What incentive will there be? Besides, why does Obama think that Americans will work jobs that he and the Chamber of Commerce keep telling us we need to import 12 million illegal aliens to do? This is a 1930's style "solution" to a 21st century problem. Americans have changed considerably since then. The idea that the workers losing their jobs today would go to work digging or even learn the skills necessary to operate the equipment needed to realize Obama's dream is just not realistic. Is Obama going to force these workers to join a union? Or is he going to pay prevailing wages? The fact is, that trying to employ millions of unemployed bankers, stockbrokers, financial services types, call center workers, or other white collar jobs – or even many of the factory workers who have lost their jobs in this recession – on public works projects is not going to happen. Those people also need help. And offering them a shovel won't cut it."
Obama's solution is a good start. But there will have to be a lot more.
I have this picture of a former stock broker trying to learn how to operate a dragline crane or a Cat dozer.
A full sized asphalt paver is computerized and very few people are qualified to run one of them.
It should only take a decade or so to learn how to do decent work. Those blue collar guys have a lot more smarts than they are given credit for,
What can work is for lots of construction workers to be called out of the union halls and put to work. This will have a tremendous ripple through related industries (steel, stone, trucking, etc.), and I guarantee the wages will be spent, much of it in the local community.
In the south and some coastal states it is likely the construction jobs will go to the illegals who just finihsed the housing boom construction. That oughta help a lot.
Are the majority of the jobs we’ve lost in the last year on Wall Street? I think your perspective, Rusty, is skewed. I picture the stock broker managing a team of former auto workers and coal miners as they take the coal furnace out of the school where I teach and replace it with a far more efficient heat pump. Haven’t we lost A LOT of jobs in the construction industry due to housing starts disappearing? If all (or even the majority) of jobs lost were in the financial sector, there were far too many of them and they needed to be retrained to do something more productive anyway… I also picture people signing up for a program that mixes jobs with new training, but we’ll see how clear my vision is on that…