Will Obama Attempt A Spread the Jobs Around Scheme?

Austin Hill

8/28/2011 12:01:00 AM - Austin Hill

Yes, you read correctly.

“Spread the jobs around.”

You’re probably familiar with Barack Obama’s well documented intentions to “spread the wealth around.” In a discussion about his vision for economic recovery back during the campaign of 2008, he expressed that intention using those precise words (do a web search with the President’s name and the phrase, and see what pops up).

Today, the President struggles with the political consequences brought about by the stifled economy, which has been brought about his own “wealth spreading” ways. Yet within the Obama worldview, it makes sense that a President who has displayed no vision for wealth creation – he has only championed ways in which to re-distribute existing wealth – would likewise have no real vision for job creation, and would instead attempt to “spread around” the inadequate number of jobs that already exist.

Enter Dean Baker, an Economist at the liberal Center for Economic and Policy Research in Washington, D.C. As if perfectly timed with the President’s upcoming address on the economy, Mr. Baker has proposed what he calls a national “work sharing” program, calling it a “quick route to full employment.”

A quick visit to the “Center’s” website provides a brief description of Mr. Baker’s academic paper on “work sharing.” Describing the overall program, the website indicates that what is being proposed is a “system of work sharing that would give employers an incentive to maintain workers on their payroll at reduced hours as an alternative to laying them off. The system would be attached to the existing system of unemployment compensation, with short-time compensation as an alternative to unemployment compensation. This means that work sharing would require no new government bureaucracy…”

While recently being interviewed about his “work sharing” concept on the Fox Business Channel, Mr. Baker further elaborated, stating “"...we're talking about a situation where workers would work somewhat fewer hours, and make somewhat less money…” As an alternative to being laid-off altogether, Mr. Baker surmises that “alot of workers would take that in a second..."

Indeed, what Mr. Baker is proposing is best described as a “spread the jobs around” approach to employment. And no doubt it has some of the same appeal, mostly emotional appeal, that candidate Obama’s “spread the wealth around” ideas did three years ago. But just because it “looks good on paper” doesn’t mean that it’s good, functional, or even “fair” public policy. In reality, the “spread the jobs around” idea is flawed on multiple levels.

For one, the idea of making public policy of this sort erroneously presumes that businesses aren’t already “spreading around” the workload at times. Politicians, government bureaucrats, and many academicians don’t understand this, but actual business owners and managers have to make difficult decisions with their staffs every day.

If one worker is productive and another is not, an owner or manager has to make tough choices to maintain and bolster productivity. If budgets shrink, a business must make move so as to maintain productivity while at the same time trimming expenditures. This may involve “spreading around” the workload and employee compensation, re-assigning workers to different tasks, or in some unfortunate cases laying-off workers. But when layoffs must occur, a business will generally try to retain the most productive workers, while sacrificing the least productive.

An arbitrary government policy that would force businesses to “spread the jobs around” would likely undermine businesses quite severely. Rather than prioritizing productivity, as business owners and managers must, “spread the jobs around” establishes as its goal the reduction of the unemployment rate. So what if the most competent and productive workers get their hours and wages cut, as a means of providing hours and wages to less productive workers? When desperate incumbent politicians are running for re-election, spreading the jobs around becomes an attractive policy idea if it can help reduce the unemployment rate in the short run. Thus the needs and interests of the politicians are dramatically different from those of businesses.

Another problem with “spread the jobs around” is that it begins with the wrong question in mind. Asking “why is the unemployment rate so high?” is worthwhile. But a better question is “why are so many American businesses experiencing strong profits and all time high levels of productivity, and still not hiring new workers?” Those questions are related, but they are not the same. Politicians and liberal think-tank operators don’t want to ask the “why no hiring” question, because the answer traces back to some of their favorite policy creations.

The worst part of “spread the jobs around” is that it makes mediocrity acceptable. It says “America can no longer create wealth and opportunity for all, so we must force some of that opportunity out of the hands of certain individuals, and arbitrarily place it in the hands of certain others.”

“Spread the jobs around” implies that for some people to win, others must fail just a bit. This is consistent with the Obama worldview, but it is repugnant to a majority of Americans.