Published August 10, 2010
From May to July, 460,000 fewer people had jobs, according to the Labor Department's Household survey data released Friday. The only reason that the official unemployment rate hasn't soared is simply because 1.2 million people also gave up looking for jobs and left the labor force. Everyone wants to fix this, but the new $26 billion Democrat job package that the House passed on a largely party-line 247-161 vote today isn't about creating jobs, it is about taking money from some Americans to give to public employee unions.
Democrats like to pick favorites and the new stimulus is no different. $16 billion of the $26 billion goes to public teachers, and some other money goes to subsidizing other state and local government workers. $87 billion of last year's $862 billion stimulus went to giving public school teachers wage increases and hiring more of them.
By March this year, more than two-thirds of the jobs supposedly "created or saved" with stimulus funds were in education. Though the accounting rules behind these claims make little sense. Take the California State University system claims that the money they received saved 26,156 jobs, more than half the university's statewide work force. That is more than the total number of jobs saved in Texas and in 44 other states. Each saved job reportedly cost about $10,000. Yet, "this is not really a real number of people," CSU spokeswoman Clara Potes-Fellow said. "It's like a budget number."
The irony is that the first round of stimulus funds actually put many education jobs in jeopardy. You see, the stimulus mandated raises for teachers in grades K-12. The first year of the stimulus covered those higher wages, but, without the extra cash and not being allowed to rescind the increases, the only remaining option was to threaten job cuts. The higher wages actually increased the number of jobs that schools districts would have to cut. The government money is like a drug -- the more you take the more mandates one is obligated to follow and the more dependent states are on getting the money.
But that isn't the only problem. Teacher unions in many states won't even accept freezes on future wage increases. Anyone who wanted a lesson on the unreasonable public workers' demands need look no farther than New Jersey. In exchange for promising not to lay off any teachers, Governor Chris Christie (R) asked that public teachers contribute 1.5% of their salaries toward the cost of their benefits package and accept for a one-year wage freeze. They refused. In that case, why should taxpayers from the rest of the US step into prop up these unions?
Yet, even if the numbers of "created or saved" jobs were more than mere accounting gimmicks, you can't just add up where the money is spent and claim that as the total number of jobs created. You also have to what happens to those jobs where the money would have otherwise gone. Government doesn't create new spending; it merely moves it from where Americans would have spent it to where the government wants it spent. We see the jobs "created" by the new spending but not the jobs destroyed from where the money has been taken.
Indeed, all the chaos created by moving around a trillion dollars of stimulus has increased unemployment. Moving money from some firms to other favored companies and government agencies also moves jobs. But people don't instantly move from one job to another and they ended up being unemployed while they find their new jobs. Some argue that all our problems can be solved with even more government spending, but the solution to a slowing economy isn't to create even more of this chaos.
All this money going to public employee union members thrills labor unions. The Hill newspaper reports that unions plan a massive campaign for Democrats as a reward for this new spending. As soon as the new spending is passed, AFL-CIO President Richard Trumka promises: "We will do the most intensive on-the-ground education program that we have done in a number of years.”
Democrats are making a big deal about cutting their August vacations short so that they could return to Washington to vote on this new stimulus bill. But Democrats shouldn't be rewarded for simply giving jobs to their political supporters. Many Americans are suffering. The goal isn't how many Democrat supporters get raises or keep their jobs, but how many Americans have jobs.
John Lott is an economist, FoxNews.com contributor and author of "More Guns, Less Crime."
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