Creating Real Jobs

Pages: 1 2

Massive, but failed, federal jobs programs overlook two key sources of real job growth. Namely, exports and innovation.

“An increase in sales from exports creates twice as many jobs as a dollar from sales in domestic demand.” Technology firms “create even more jobs.” And jobs in exporting “pay 9 percent more” than work in firms that export less; while work in technology pays “90 percent” better than other jobs, according to the Information Technology & Innovation Foundation (ITIF).

Moreover, ITIF said, an increase in the federal research and development tax credit would not only pay for itself in added revenue, it also would encourage companies to increase hiring “within a matter of weeks.” ITIF is a non-partisan research and educational think tank.

Through June 2010, many industries “have not seen even one net new job” created since the $787 billion so-called stimulus act became law in 2009, according to a tabulation by Rep. Dave Hall (R-MN). Obama administration economists Christina Romer and Jared Bernstein on January 1, 2009, in a 13-page study, forecast that “at least 3 million jobs” and possibly “between 3 and 4 million” will be created or saved by the end of 2010.

Here are their job forecasts and the dismal results as reported by the U.S. Department of Labor: Construction Forecast—678,000; Loss—853,000. Manufacturing—408,000; Loss—707,000. Financial—214,000; Loss–310,000. Retail—604,000; Loss–286,000. Professional & Business Services—345,000; Loss—211,000. Information—50,000; Loss—158,000. Transportation & Warehousing—98,000; Loss—155,600. Wholesale Trade—158,000; Loss–135,400. Other Services—99,000; Loss—72,000. Leisure & Hospitality—499,000; Loss—69,000. Mining—26,000; Loss-16,900. Utilities–11,000; Loss—7,500.

The only sectors where jobs would be created, as forecast by Romer and Bernstein, were: Government—244,000. Actual increase—201,000. Education, Health & Social Services—240,000. Actual increase—434,000.

The U.S. is lagging “far behind” other major economies in putting the jobless back to work, The Wall Street Journal reported July 10, in an analysis of employment in 11 countries. Total employment in June in this country was down 4.8 percent from December 2007, the article said.

In its report in January, the ITIF made a convincing case that if the federal research and development tax credit were increased a bit, it could help to create 162,000 jobs and “boost innovation and U.S. economic competitiveness, thus laying the groundwork for long-term prosperity.” ITIF estimates that expanding the tax credit from 14 percent to 20 percent would lead to an “increase in annual GDP by $90 billion, an increase in patents issued to American inventors by 3,850, and an increase in tax revenues by $17 billion, much more than the cost of expanding the tax credit itself.” The current tax credit spurred private-sector research through the 1980s. But, ITIF’s study pointed out, “Other nations soon learned” from our success and began to allow more generous tax credits. So, by 1996, the U.S. had fallen to seventh in R&D tax credits among the 30 OECD nations. By 2004, we had fallen to 17th.

The R&D tax credit, created in 1981, was never made a permanent part of the tax code. Congress has had to act each year to keep it alive. Leading up to the July 4 congressional break, the Senate tried three times to pass the bill. But it was entangled in “paygo.” This is the law requiring that any new spending increase or tax cut be offset by other spending cuts or tax increases. As tax hikes were proposed on more and more industries, businesses finally balked, at least until something can be worked out.

America’s economy is “in danger of losing our greatest competitive advantage: our genius for innovation,” John C. Lechleiter, CEO of Eli Lilly and Company, wrote in a July 10 Wall Street Journal op-ed piece. “[W]e are facing today nothing short of an innovation crisis in America’s life sciences. The industry I know best, biopharmaceuticals, is facing unprecedented pressure. R&D costs continue to rise, fewer new medicines gain regulatory approval.” New molecular medicines approved by the Food&Drug Administration (FDA) are lower than in the late 1970s, he said.

A society that “appreciates scientific inquiry and free markets where innovators can expect to be rewarded…has always been an American strength.”

Pages: 1 2

  • Rifleman

    Hussein and the dp congress actually blew over a trillion on their 'stimulus' and over $120 billion is recurring, so that's just added onto the deficit. Since they blew most of it 'saving' government jobs, it just cost private sector jobs. Like all socialists, Hussein and the dp are putting the cart before the horse with the predictable result.

    • Stephen D.

      Rifleman my friend, what you haven't taken into consideration is the number of jobs BHO has created overseas with OUR stimuus (tax) money. In this regard he may count it as a success! Also, you shouldn't discount his ongoing efforts to engage the Muslim world so they can "feel good" about themselves. THAT will create jobs too don't you know. I'd like a count of all the moeny from the stimulus that went to other countries and the reasoning behind it. I'd also like to know how much went to so called "shovel ready" projects. I can't help but wonder as to the REAL reason they keep doing things that only hurt our country and never anything that will help.

  • Jean

    "Massive, but failed, federal jobs programs overlook two key sources of real job growth. Namely, EXPORTS and innovation". (emphasis mine)

    No kidding. It's so obvious that, if the goal were actually to benefit and restore the economy of the US, measures would already be rolling along.

  • Hammer2

    In the old Soviet Union, Russians could easily tell a foreigner just by looking at their shoes. Soviet made shoes were all that was available to the average citizen & were of poor quality. Therefore, if you had nice shoes – you were a foreigner.
    With all the controls & regulations being placed on business in America, not to mention outright takeovers, can it be very long before we Americans are find ourselves in a Soviet style economy?

  • WeWillie

    Some few thousands of good paying jobs can be created by allowing horse slaughter for human consumption. Japanese and French love horse flesh. The 35,000 BLM "wild" horses in fedlots could be sold for cash and the over aged horses of the Amish, failed race horses and other unwanted horses could be converted to cash. What pray tell is morally wrong about using horses for human consumption?

  • scum

    actually the crash was due to a quarter century of massive deregulation which led to little oversight of the financial/mortgage sector. Primarily, Phil Gramm and those who favored the liquidation of Glass-Steagall are to blame. In terms of job creation, the so-called 'real jobs' listed in this article are largely gone because in the last quarter century we tried another experiment – the 'post-industrial society'. This was a fancy name for American corporations shipping jobs out of the country as fast as they could. Job creation? No, it won't happen due to the stimulus – it has to be a far more radical approach that no one on this site is willing to broach. FPM stands for 'more of the same tired old politics that got us in this mess.'


    "Creating Real Jobs"
    This is very useful information—for those who *want* to create jobs. Obama doesn't. Don't you see it? He wants to break the back of the economy, and the country—once and for all. Why would he want more jobs? And pointing out the best way to create jobs makes his job (of NOT creating jobs) even easier. Don't help him, he is successful even without your help.

  • Thunder

    9.5% unempl. means 90.5% EMPLOYED….and cities & states go broke -> because people do not work and do not pay taxes; and half a million people lose their jobs each month…And how many millions "quit looking for a job"? No way to know….Gov. decides???
    Let's see the truth: is the unemployment 25% or higher?

  • cynthia curan

    Well, the only way you can have high taxes and production is during war. WWII brought alot of massive production and granted today Republicans that favor massive funding for aerospace which the first Bush opposed since the cold war are not going down that route. If cold war spending cuts were less than BushI did and Reagan had not given 3 million illegal immirgants legalization maybe, Southern Ca which depended upon that defense spending might have stayed in the Repubician category instead of going to the Dem side.

  • cynthia curan

    Well, Obama is in some ways worst than Roosevelt. As the Ceo of Verizon stated the power grind is agining.Obama could have put a lot of money in that which would have helped the economy when it pick up. Look at TVA, a project that Republicans hated years ago but made electrically much more possible than in Ten and some other southen. Even Johnson that expanded the welfare state, pushed for electrical development inTexas. This is why in some ways the new left is worst than the new left.

  • Wdwrkr

    Eliminate the R&D tax credit! Instead, reduce business taxes (as well as all other taxes). That will create jobs and boost the economy.

    However, that means less gov't meddling in the economy. So, unfortunately, the pols won't go for it.

  • best night shift jobs

    advertising and *********** with Adwords. Well I?m adding this RSS to my e-mail and could glance out for a lot more of your respective intriguing content. Make sure you update this once more very soon..