5 Worst So-Called Job Creation Ideas From the GOP
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The Associated Press reports:
"The Minnesota congresswoman told supporters at a packed sandwich shop that the corporate income tax needs to be reduced because companies are moving to other countries to save money. She was later asked by a reporter whether changes to the minimum wage should also be considered to balance the cost of labor here and overseas.
'I'm not married to anything. I'm not saying that's where I'm going to go,' she said."
It can't be said enough how wrongheaded an idea this is. First of all, as noted above, the problem with the US economy right now is that not enough people have money to spend. The ongoing downward pressure on wages from the cumulative effects of union-busting, trade deals and long-term unemployment has left too many Americans with too little money in their pockets even if they do have jobs, and the lack of spending is the reason companies aren't hiring. Consumers, as Robert Reich points out, are the job creators.
“Every CEO of every company that continues to squeeze payrolls (Verizon, are you listening? Ford?) needs to understand they’re shooting themselves in the feet. Where do they expect demand for their products and services to come from?”
And it's fitting that just as Obama announces that labor economist Alan Krueger will be joining his team of economic advisers, the minimum wage comes up for discussion again. Pat Garofalo again:
“...almost all of the economic research on the subject shows that the minimum wage has little to no effect on employment. The most well-known researchers on the subject — David Card and Alan Krueger — examined a minimum wage increase in New Jersey, and found that 'employment actually expanded in New Jersey relative to Pennsylvania, where the minimum wage was constant.'”
Cutting the minimum wage would add still more downward pressure on wages, continue the hollowing out of the middle class, and keep the economy stagnant. Seventy-three percent of the jobs created since the so-called “recovery” began have been low-wage positions; the economy continues to struggle, and as Bartlett noted, labor costs aren't the problem. Low wages are.
It's not surprising that nearly every “job creation” tactic thought up by the Republican party is corporate welfare barely even thinly disguised. What is surprising is how many of these ideas have been and may continue to be adopted by Democrats who fear the ideas that would actually work are politically untenable.
That's why it remains vitally important to point out how wrongheaded each and every one of these policies are. Put together, they're a recipe for continued economic stagnation and increasing inequality.
Sarah Jaffe is an associate editor at AlterNet, a rabblerouser and frequent Twitterer. You can follow her at @seasonothebitch.