Jeremy Truitt

An attempt to understand the world of current events, finance and the economy on a level that allows me to teach it. I'm a journalist. Oh and the occasional post about family, life and kids!

President Obama And Mitt Romney Say They’ll Create Jobs, But Does It Even Matter?

 

The upcoming election no doubt has everybody polarized. It’s no surprise that the election most likely hinges on one very serious word: Economy.

I’ve heard both President Obama and his challenger Mitt Romney make their point about jobs. Romney addressed the world at the RNC recently and talked specifically about jobs. “What America needs is jobs, lots of jobs” was his key point on the economy in his speech. On the other side, the President also promises jobs. Just today he was in Iowa promoting his plan to make sure veterans are able to secure jobs when they come back from active duty.

I couldn’t agree more. Both the President and Mitt Romney absolutely must energize their respective bases by promoting job growth. Not just growth, but lasting, durable growth in the private sector.

Here’s where I scratch my head, where I don’t understand the discrepancy between creating more jobs and increasing our already incredible quality of life. The issue we need to address is NOT simply job creation. It’s more important. It’s the issue of the erosion of middle-class incomes. We need quality, good paying jobs and not more retail jobs.

A recent study put out by the National Employment Law Project reveals some seriously disturbing trends. We’ve all heard the statement “the widening gap between the rich and poor,” but what does that mean exactly? Does it mean the rich are making more money and paying less in taxes than the middle class? The report breaks it down pretty well.

First, the trend has been happening for a long time but the polarization has recently increased. In the great recession, the United States lost jobs in all sectors, but the majority of losses were concentrated in the middle-wage areas, such as construction, manufacturing, real estate and insurance.

Contrasted with the recovery, the majority of new jobs created in the past few years have been lower-wage jobs. The industries growing the most recently are retail, food preparation, freight workers and waitstaff. Herein lies a huge problem. In the recession, 60% of job losses were in the mid-wage category. Throughout the recovery, 59% of the total net jobs created have been low-wage jobs.

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How does the President or his challenger really fix this? That I do not know, but what I do know is the claim that we must “create jobs” is a gross understatement, regardless of which candidate makes the claim. What we need is to stop the hollowing-out of the workforce and create legitimate, long-term growth. A huge boost would come from real estate recovering, an act that may well take a decade or more to solidify.

President Obama is ideologically opposed to his challenger Romney. The President believes the government is the key to recovery. He believes the government needs to be involved to drive the recovery. His plans to spread incomes through higher taxes on the rich and additional subsidies to the middle and lower-class is due to a genuinely liberal ideology, and that’s fine. He believes that’s what our country needs to recover and i’m certainly nobody to criticize or disagree. The issue I take with this is with the economics. People respond to incentives, economically and otherwise. When the government increases capital expenditures and spending to increasing welfare and food stamps, people are less inclined to work hard. Why strive for a $300-a-month raise in a better job when the individual will lose part of his or her $250-a-month food stamp allotment?

I believe the same general idea for Romney’s ideology. “Get the government out of our way, let the private sector run un-encumbered and create jobs” does NOT mean we’ll be better off. That just means more jobs will be created, but if they’re 59% low-wage positions then the government will still increase spending on food stamps and other items due to the continued erosion of the workforce.

At the end of the day, dig deeper than what’s reported on TV. Ask more questions. Don’t just listen to a presidential debate or a pundit on a network news station tell you what to think. Challenge and analyze what they say and think independently. It’s easy to tell the American people we need to create jobs, but another thing entirely to lay the fundamental groundwork to rebuild and follow through.

 

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8 comments on “President Obama And Mitt Romney Say They’ll Create Jobs, But Does It Even Matter?

  1. Kyle M
    September 2, 2012

    Fantastic post. Couldn’t agree more about the quality of jobs being the issue. Does putting a little more money in someone’s pocket via tax breaks so they’ll buy some clothes at the GAP really help the economy? Or does a temporary construction job from a gov’t project solve a long-term unemployment problem? Great, nuanced perspective in this post. Looking forward to reading more of this blog.

  2. tax preparation
    September 12, 2012

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  3. Scott Erb
    September 16, 2012

    Yes, the statistics are alarming, especially since the early eighties when a mix of de-regulation, lower taxes and spiraling debt began to reverse the process of having a growing, more prosperous middle class. I also suspect that right now technology increases productivity and due to the nature of the job market the wealth that generates goes overwhelmingly to the owners of big business. This creates a desire for more wealth that is supposed to lead to investment, but has instead created bubbles as people desire quick money. De-regulation of the financial sector has made that worse.

    This also was made worse by deficit spending during booms (1983 – 90, then 2002 – 2007). You don’t increase debt when the economy is booming – that either leads to inflation or speculative bubbles. I’m rambling, but I guess when it comes down to it our problems are structural and it’ll take a national rethinking of priorities before we can deal with them. No President can do that alone.

  4. wolfthought
    September 22, 2012

    What matters is the type of jobs. Private Secotr? Government jobs? Government jobs are payed for by the taxpayer and are more often than not already funded by . . . (can ya guess?) . . got it yet?. TAXES. The Government has NO MONEY. It is OUR Money, not theirs. Private sector jobs are the ones that Create income by producing towards a demand, or providing a service to fill a need.
    The surest proven way to stimulate the economy is not to print more money and pass it out like candy. It is to LOWER the COST of DOING BUSINESS. Thats right. Cut corporate taxes. And incidentally do something to control the Insurance Companies, which are a HUGE part of corporate expense.
    Won’t happen though.
    It isn’t about doing whats right for the country, its about appeasing the loudest barking dog.

    • Jeremy Truitt
      September 22, 2012

      You make a compelling argument. I think government involvement does have a place in the marketplace. Government subsidies can help spur growth through tax-breaks for job hiring, which i turn leads to more general revenue, etc. Thanks for the comment!

  5. John
    September 24, 2012

    Thank you for visiting my website today sir.

  6. theraineyview
    September 27, 2012

    I believe that jobs are only half the economic picture. A job is a position with a boss. I think about half of us ought to be working for ourselves at any given time. I believe the Republican platform can help make that closer to reality, whereas the Democrat platform would make it remote or unimaginable.

    • Jeremy Truitt
      September 27, 2012

      I can agree that jobs aren’t the whole issue! Gosh we could spend all day talking about the election holistically! Thank you for the reply.

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