What Is A Job? 1

Government can't create jobs because it doesn't know what one is.

For all the heat generated by the raging issues of the culture war, what most Americans really care about at the moment is "jobs, jobs, jobs."  Our unemployment statistics are the worst since the Great Depression and that leaves out the millions of suffering people who aren't counted because they're underemployed or have given up hope of ever finding work and stopped looking.

Lefty shill Paul Krugman thinks he knows the solution.  He has been beating this same drum for years now:

The federal government could provide jobs by ... providing jobs. It’s time for at least a small-scale version of the New Deal’s Works Progress Administration, one that would offer relatively low-paying (but much better than nothing) public-service employment.

Sounds logical, doesn't it?  Even now, government can borrow uncounted trillions, so why not just offer a last-ditch government job to anyone who wants one?  People could still look for better-paying work, but in the meantime, they'd be earning something and staying in the habit of getting up in the morning.

One little problem: in economic terms, most government jobs are not actually jobs - they're transfer payments which don't add to the economy, but rather subtract from it.

So let's talk about what a job actually is, and why an increasing number of apparent jobs aren't.

Job = Productivity

Let's consider Roger, a severely obsessive-compulsive individual who can't help but constantly clean, re-clean, and re-re-clean his house.  His brain is so addled that he can hardly even step out of his front door without being dragged back in to attack some imaginary spot of dirt.

Is he lazy, or is he a hard worker?  Well, if you visited him you'd probably say you never saw anybody work so hard in your life, barely stopping to eat or change clothes, and collapsing every night totally exhausted.

Does Roger have a job?  Well, no, he's "working" for himself and not for pay.

Is Roger doing anything useful?  No - because his house does not in fact need that much cleaning.  His efforts are pretty much a total waste.

Now suppose that some kind hotelier employs poor Roger to clean his hotel.  Being a large hotel, it's not physically possible to overclean it - there is always some room that does, in objective fact, need cleaning.  Roger is even provided with a small room of his own to live in so he doesn't have to commute via the dirty streets, and is provided food from the restaurant kitchen.

Roger is living almost exactly the same life as he did before - working hard cleaning all day - but now he has a job.  Now he is contributing to the economy, doing something that needs to be done and which, by his doing it, society in general is better off.  Value is increased because of Roger's efforts - obviously a clean hotel is worth more to stay in than a roach motel.

There's a counter-example - the famous Maytag repairman of the old TV commercials.  He sits around all day next to the cobweb-covered phone, waiting for a repair call that never comes because Maytag washing machines don't break.

Does he have a job?  Sure - he's being paid to be available for immediate equipment repair.  The joke of the commercial is that Maytags last forever, but we all know that's not true: they do break eventually.  Having someone instantly available to fix them is worth having in and of itself, as a kind of insurance.

We can see that, contrary to popular belief, whether you "have a job" does not directly relate to whether you're constantly in motion "working hard."  You may be producing something worthwhile by your very presence in a chair; you may be producing nothing whatsoever despite constantly running around sweating your buns off.

No Boss Required

It seems easy to say that you "have a job" if you're getting a paycheck, but that's not true either.  Rush Limbaugh created more furore than normal by calling a slut for what she was.  Hordes of offended feminists instantly howled for his head, calling for him to be immediately sacked.

It took them a few days to realize their mistake, but Rush Limbaugh can't be fired.  He has no boss and receives no paychecks, so there's nobody to fire him.  Rush is a businessman: he sells customers a service that is valuable to them.  What he sells is people's ears - millions of people voluntarily choose to listen to his show, and many companies would like to advertise their own wares to his millions of listeners.  They pay Rush to mention their stuff on air in the hopes that Rush fans will choose to buy from them.

The feminists quickly targeted these advertisers to cancel their contracts with Rush, with some success, but there was a predictable result.  Carbonite online backup has been advertising on the Rush Limbaugh Show for many years because it works; loads of Rush fans have signed up for Carbonite's service.  As soon as Carbonite's CEO announced cancelling Rush, what happened?

Since the market opened on Monday through its close today, Carbonite stock (NASDAQ:CARB) has plummeted nearly 12 percent, outpacing the drop of the NASDAQ index in that same time period by nine-and-a-half points. It was also one of the biggest decliners on the NASDAQ on Tuesday.

Investors know that advertising on Rush's program works with the demographic he attracts.  Stopping a successful ad campaign will harm sales and lose money.

Rush Limbaugh may have no boss, but he is absolutely providing an economically valuable service to the companies which advertise with him, well worth the millions of dollars he makes them pay.  Rush may not "have a job" in the normal sense but in economic terms he most certainly does.

So if "having a job" isn't necessarily related to visible work, and isn't necessarily connected with having a boss either, how does this help us create jobs?  We'll get to that, but first, in the next article in this series, we'll explore visible ordinary jobs that are, in economic terms, not jobs at all.

Petrarch is a contributing editor for Scragged.  Read other Scragged.com articles by Petrarch or other articles on Economics.
Reader Comments

If we had true conservative in congress they would insist that people on unemployment benefits report to work WPA style. The theory against that is that they could not hunt for a job. How's that working out? There should be a tit for tat if they get a check.

March 19, 2012 10:17 AM

The problem with Krugman's idea, and so many ideas from the left, is that they assume that a lot of people collecting welfare actually want to work. Many people on unemployment no doubt want to work, but can't find work because the left and their ignoramus buddies have no idea how to "create" jobs. Most of the jobs the WPA did during the '30's couldn't be done today without 10 or 20 years of "environmental evaluations" studying the effect of Hoover Dam or Going to the Sun Highway on all the insects that might be disturbed or dislocated anyway. ONLY when WW II came along did FDR's New Deal finally work because it was no longer needed although it and FDR get the full credit.

Get out of the way of small businesses and entrepreneurs by reducing regulations and pitfalls for them that keep them from succeeding or even trying and employment will pick up. That only involves the government getting out of the way though, so it's never a thought of a lifetime politician or progressive.

March 19, 2012 3:56 PM

As a fan of Paul Krugman I must say- your refutation leaves quite a bit to be desired, so much so that I wonder if it isn't just kvetching, and nothing more, which is fine of course. Still, given how thin the argument here presented is, it makes me wonder if the author has really read Krugman at all. Having done so myself, I can honestly say that the argument for fiscal stimulus is sound by the standards of modern economics, and while the specifics of policy are always debatable, I would maintain that the misunderstanding is on the part of the pseudonymous author, rather than the nobel prize winning economist- that is to say, rather than react to what we liberals say, why not contrast those views with your own and offer an alternative?

March 20, 2012 2:52 PM

Surely you understand that the Keynesian economics that Paul espouses is simply taking from producers and growing government. That in effect is a net minus on the economy. To take capital out of the system is to kill off the creation of wealth which is what it is all about. No other system has ever raised so many people out of abject poverty than capitalism. Unfortunately no longer have as pure a capitalism as we once had and we have all suffered, especially those at the lower rung of the ladder. They have suffered in more ways than the obvious economic ways that Paul pushes. They have had their dignity taken from them by being beholding to the state for their subsistence. What price can you put on that? Deficit spending has never worked and never will as the laws of economics cannot be repealed. Paul is like the little guy that we all knew in the third grade. He was small, not an athlete, but but was quick witted. He found out early on that he could win debates with his mind and speech. Soon he would take the absurd side of things and would win them because he was one step ahead of the rest of his classmates with his wit. I feel like that has caused Paul to be behind some of his theories that have proved to be wrong and because of his ego he cannot admit that he is wrong. He has a reputation to protect so he goes merrily down the road trying to keep ahead of his critics. Alas for Paul his critics are not third graders but people who are as quick witted as he and they simply shake their heads at his nonsense or laugh at him. Paul is to be pitied.

March 20, 2012 4:50 PM
Add Your Comment...
4000 characters remaining
Loading question...