When analyzing different facets of Obama's healthcare plans or other economic plans, a common question is wondering how many jobs a given program will create.
This question is precisely the wrong question and gives a distorted view of the efficacy of any program. So, I thought I would write this diary to analyze what is a cost versus what is a benefit.
A common refrain on this site and elsewhere is (justifiably) a concern for jobs. The unemployment rate permeates all discussion on this site and elsewhere. However, not all jobs are created equal.
For any job, the fact that someone is employed is a secondary economic factor. The real thing one wants to consider with respect to a job is asking what of value it produces. If the government creates jobs that do not generate actual value, the people employed in those jobs are just employed as a form of 'welfare' on transfer payments from the rest of us.
Let us discuss health care for a moment. Health care is a dead bang loser of an economic activity. Any discussion of health care should be centered around limiting the size of health care spending relative to the rest of the economy, not growing it.
I support single-payer health care, but the prime motivation to me is the ability to get superior health care services for a cheaper price, not the fact that more people will be employed. In fact, the less people that are employed in this area, the better, and a selling point for single payer is the lower number of employees required: if there were a comparable health care system that required 0 employees, we would choose that one! As traumatic as it would be for them, laying off hundreds of thousands of useless health insurance employees would be a huge medium to long term boost to the economy as those people are transitioned to sectors of the economy that actually produce physical goods and services of value.
(Sidebar: I also support welfare or job training for people displaced by this government move, but again, this is a cost paid by us to the health care workers, not a net benefit.)
Secondly, government employees. The laying off of public sector employees in this economy is not a problem at all (other than to the people involved, which as I note above there are humane ways to deal with), as long as we are willing to forego whatever services they were providing. For example, even in a good economy, keeping the DMV open for four days instead of five to save a few employees is perfectly acceptable as long as the customer service losses are acceptable. The government employees are identical to the health insurance employees: they are only as useful as their job's productivity. Just like health care, government is more or less a dead-bang economic loser. While government is necessary (cue the people who are going to ask whether I think the FDA is a good idea, etc, and yes, I do), it doesn't generate fundamental value, it exists due to people in the private sector who are generating value. Without a private sector making meat, there is no FDA to regulate it.
So, what is a value-generating job? This area is a wide area of contention, but I'll argue that a value-generating job is one that generates a good or a service that can be sold in the private sector at a competitive value. These jobs generate actual value and wealth, and those kinds of jobs have been massively on the wane as non-value-add government, healthcare, and marginal-value service jobs, and other jobs such as comparatively useless finance, insurance, and real estate have been on the increase.
So, if a "job" that is generated by some government effort does not result in a real benefit or a competitive industry (i.e. Cash For Clunkers merely used government money to buy cars for some people; a transfer payment from the rest of us to car dealers and clunker owners), it hasn't helped the economy at all. The program has merely helped some people at the expense of everyone else. At that point, you might as well just pass a welfare program and be done with it, because that's all it is.