Every month roughly five million new jobs are created in the U.S. and almost that many are destroyed, leaving a small net increment. International trade accounts for only a minor share of that staggering job churn.
Pointer from John Cochrane.
One wishes that such an op-ed were not necessary, but this is an election year.
Blinder also says that the government should do more to help those who lose their jobs due to shifting trade patterns. He doesn’t explain why that policy shouldn’t apply to the much larger number of people who lose their jobs as a result of shifting trade patterns within the U.S. Nor does he explain why the government shouldn’t compensate anyone who loses a job for no fault of their own.
Comments on Cochrane’s blog are astonishing. People want to use an accounting identity to prove stuff.
“Every month roughly five million new jobs are created in the U.S. and almost that many are destroyed, leaving a small net increment. International trade accounts for only a minor share of that staggering job churn.”
Changes in [minimum wage, regulation, taxes…] account for only a minor share of that staggering job churn.
Here’s an important side issue — whenever there’s some new gov’t spending “investment”, the number of “new jobs” is always mentioned.
Let’s say it’s 10 000 new jobs for Fed support to CA for a high speed train.
10 000 sounds like a lot, as compared to … nothing.
10 000 is pretty small potatoes when compared to 5 000 000.
Similarly, if those 5 million new jobs are from a million firms, avg 5 new jobs per firm asking for new help, then it becomes very feasible to claim that the slightly higher taxes needed to pay for the 10 000 new jobs are going to cost enough that 20 000 companies decide to hire 1 less person — for a net job loss of 10 000 due to the unintended consequences. This is still only 20 000 companies out of 1 000 000, with no way to know which companies they are.
The attraction of the “certain” 10 000 new gov’t funded jobs is all too often more attractive than the less countable 20 000 peaceful company hires that don’t happen.
Economists seldom describe this issue clearly, and especially Dem economists who so often are cheer leading more gov’t actions.