- March 28, 2024
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Gov. Rick Scott is making the rounds in Florida touting a new job board regulation bill and a new budget he hopes will create jobs (see letters below), but he doesn’t mention the part where jobs are already guaranteed to be lost before his plans even start.
Scott claims he’s a “jobs” governor, so he’s focused on making the impression he’s adding them through his governance. Talking up the merits of better job placement agencies, job training and cutting wasteful job programs, he’s making political hay from the debacle of 2011’s Workforce Central Florida red cape spending spree. On March 30 he signed a bill at Workforce Central Florida giving him the power to fire the heads of job placement boards. And he’s giving Floridians confidence that they’ll be better trained to get jobs soon.
But when they’re done learning a new career field, many Floridians may find that beyond his feel-good job training programs, he’s relied on tried-and-failed theories to actually create those jobs he’s been cheerleading about.
The mechanics of his plan were already clear in the budget passed in March: Cut the money that pays for jobs in government, and when those jobs disappear, do something that causes the private sector to add jobs.
It’s a supply-side economics balancing act: If you want less money flowing through government and more money flowing through the private sector, you cut from one (through slashing expenses, which leads to layoffs) and add to the other (through slashing business taxes in the hope they’ll hire workers).
The Florida Legislature’s plan: Cut government employee pay by 3 percent, cut $300 million from higher education and $1 billion from pensions, throw that money into tax cuts for private sector companies, then wait for the companies to create new jobs to pick up the laid-off government employees. Hopefully the wait isn’t too long, given Florida’s notorious tone deafness to economic reality. Last year, while we were setting national records for average duration of unemployment at more than 40 weeks, Florida cut its unemployment compensation maximum from 26 weeks down to 13-23 weeks.
It makes sense that if jobs are lost in the public sector they’d be found in the private sector, particularly in a (slowly) recovering economy. It’s simple subtraction and addition. But there’s a caveat to that — it doesn’t work.
If government is so inefficient that it’s wasting our money employing workers in health care (through Medicare funding at private hospitals) or education, then why would a more efficient private sector need to hire back more employees than the government had to lay off? Our supposedly bloated state government wasn’t holding back on hiring workers that the private sector was chomping at the bit to gobble up. We’ve had unemployment above 9 percent for three years.
But that’s just in the stagnant economy we have now. Even in a recovery, the idea of increased private sector jobs may now be a pipe dream.
As the New York-based Algemeiner Journal pointed out in its April 9 article “Corporations Plan for Post-Middle-Class America,” during the last four years more of America’s largest employers have been working on how to make more money off less employees, rather than working on hiring more employees during times of growth.
Coupled with government layoffs, it’s like a giant game of musical chairs. Lose your seat, and the music starts playing. But nobody wants to get up from their government gig if they can’t be sure there’ll be a corporate job waiting for them.
And private sector hiring is far from guaranteed. As reported in the Tampa Bay Times on March 11, a requirement that budget tax cuts actually produce more jobs was struck down before it passed.
That’s because there is no guarantee. It’s the lingering specter of supply-side economics. The simple theory: If you cut taxes on businesses, they’ll use that money to hire employees.
But to do what? For every $16,000 in taxes that the government cuts from your business’ liability (roughly equivalent to one minimum-wage full-time employee in Florida) does $16,000 worth of new work suddenly appear? Do $16,000 worth of new customers suddenly walk through your door to pay for that employee? Did those customers suddenly have $16,000 in corporate tax cuts so they could come spend it at your business?
No, they didn’t. They’re busy playing musical chairs. The government took away their seat, but they keep circling, ever optimistic that they’ll find another one when the music stops.