By Hank Robison, Chief Economist
When judging government plans to create jobs I’m reminded of the old parable about a man and a fish: give a man a fish, he eats for a day; teach him to fish, he eats for life. Seemingly lost on policymakers is the all-important distinction between temporary and permanent jobs.
A temporary job lasts as long as the spigot of funding lasts. With the bridge rebuilt, or the road resurfaced, the construction workers are again out of work. Likewise when the one- or two-year federal aid to public employment runs out the teachers and firemen are on the unemployment roles again. If we’re lucky we got a needed bridge or road resurfacing, because we are going to be paying for it, with interest.
Contrast these temporary job remedies with programs aimed at creating permanent jobs (for example, programs that aim to fill skills gaps, or fill existing private sector job vacancies, or create skills projected to be under-served in future years). While often harder to identify and implement than programs that simply allocate funds — some would say “throw money at” this project or that — permanent jobs can be self-financing. And this self-financing element is of crucial importance.
The public worries about the nation’s looming debt and deficit situation, and skepticism abounds for government efforts to restore the economy’s health. Yet a program that creates a permanent, as opposed to temporary, job adds tax receipts back not just this year but for years to come. In financial terms, it holds the promise of being self-amortizing. Perhaps this is what we should be focused on.
Teach a man to fish and he will pay you back with interest.
Illustration by Mark Beauchamp