Gov. Snyder shakes hands before delivering his speech.
During his State of the State address Wednesday, Gov. Rick Snyder highlighted a Flint small business run by nuns that hires at-risk women to make hospital scrubs. The business currently employs, according to Snyder, 26 people.
It’s great that this business employs women who often have few economic opportunities. Hopefully, they continue to be successful because it sounds like they have good hearts and make a great product.
However, isolated examples of small business success are hardly indicative of any meaningful, broad-based economic recovery. Currently, Michigan’s unemployment rate is 8.8%. Only Rhode Island and Nevada have higher unemployment.
Let’s be honest, it would take hundreds, if not thousands, of 26-person enterprises to effectively reduce unemployment in Flint alone.
Here’s something roughly 100% of politicians and 95% of the rest of us don’t seem to understand: Over the long run, all the things we think “create jobs” (self-described “makers,” tax breaks, career-training programs, and business-friendly governors) don’t.
Jobs are a by-product of an economic demand for labor. The amazing technological innovations of the last generation has made almost every task imaginable less labor-intensive. As a result, the economy requires fewer man-hours of labor and, therefore, fewer jobs.
Frankly, absent a radical redefinition of what constitutes full-time employment—think Henry Ford instituting the eight-hour workday—there is little that will drastically improve employment rates.
Even the 26 women who work for the Governor’s favorite nuns don’t necessarily represent new jobs since their employment doesn’t increase the demand for hospital scrubs. When the nuns win a scrubs contract, a different scrubs-making business isn’t getting that contract.
Economics is called the dismal science for a reason. It’s a zero-sum game.
Even things that would seemingly help the local economy are more complicated than you might think. Let’s say you make a point to purchase locally-grown food from the farmer’s market instead of crops from, let’s say, California. Local jobs, right?
But what if your local farmer brings his crops to market in a Toyota truck, while the California farmer is a loyal Ford buyer. Are you helping local farmers or hurting local autoworkers? And what if Toyota workers in Japan like to wear made-in-Dearborn Carhartt jackets?
The best thing we can do for a broad-based, stable economy is to create a fairer division of labor to ensure everyone (in Michigan, in the United States, and across the globe) has an opportunity to fully participate in the economy as both producers and consumers.
That’s easier said than done, and there are few simple solutions. However, a constructive process toward a stronger economy starts when politicians on both sides of the aisle skip the feel-good claptrap stories about ten jobs “created” here and twenty “created” jobs there.
Because, seriously, no one is ever blown away by this shtick.
