The N&O’s Rob Christensen writes this article on the topic of jobs – and tries to confuse the reader by wishing away the difference between government jobs and private sector jobs.
Some people – particularly political and intellectual elites in elected office, think tanks, academia and journalism – like to make major distinctions between jobs in the public and private sectors.
But for the people I grew up with – I have working-class roots – a job is a job, whether you are working down at the plant or whether you are working for the school system.
I also doubt that the people at Food Lion or Lowe’s or Walmart or at the local car dealership or real estate agency look closely at whether their customer is drawing a check from a public or private employer. They are just glad to have someone walk in the door.
In 2003, when Pillowtex in Kannapolis declared bankruptcy and laid off 7,650 employees, it was the largest layoff in North Carolina history and sent state leaders into a near panic. The House bill seems likely to result in twice as many layoffs as Pillowtex. But state leaders seem OK with that.
Sure, to the person drawing a paycheck it makes little difference who signs it. They very well may just be happy to be working. But Christensen does a grave disservice to his readers in pretending that all jobs are created equally.
There are in fact very real differences between government jobs and private sector jobs. First, government jobs are funded primarily by tax dollars – a revenue stream extracted not voluntarily but by threat of force. Private sector jobs are funded by voluntary cooperation between entrepreneurs and consumers. Big difference.
Secondly, the government has no resources of its own. Every dollar it spends on emloyees must first be taken from others. Every dollar spent on a government job means one less dollar available for private sector job creation. It is a zero-sum game. And these private sector jobs lost and never created are not “virtual” jobs – they effect real people by reducing the amount of opportunity available.
Moreover, we need to understand that jobs are a means to an end – an input into creating a good or service. It is easy to “create” jobs. But what is important for economic progress, for society’s standard of living to increase, is wealth creation. Government could ban all farm equipment and machinery tomorrow – it would surely “create” more farming jobs as the manpower required to tend to the crops would increase dramatically. But no one would argue that this job creation has made us better off.
This brings us to another key difference between private and government jobs. Jobs in the private sector are applied in profit-seeking endeavors, and in the market’s weeding out process of profit and loss, labor is constantly being redirected toward its most valued uses. In government jobs, there is no such process. Labor is applied by political decisions, with no profit/loss feedback mechanism in place. More often than not, the worse a government program performs, the more workers are hired to that program in order to “improve” it. There is no incentive to efficiently utilize the input of labor. In this case, resources are squandered (just as in the farm equipment example) – and at the direct expense of private sector jobs that would be subject to the market process.
So it makes a huge difference whether jobs are with the government or in the private sector. The reduction of government positions proposed in the House budget will unquestionably present a hardship for those laid off. But it will free up resources for very real jobs in the private sector. And even more importantly, free up resources to be directed by the market process – thus enhancing economic progress.