If you’re trying to keep track of the money spent by our Federal Government for “stimulus”, you must know that it’s not easy. CNN has a guide that I’ve found handy that tells me the Government has committed to $1.9 Trillion (With a capital T) and the Federal Reserve about $6.4 Trillion. It adds up to about $75,000 for every family in the USofA, a number so large that it still defies description. I was wondering if somewhere in all that was, in fact, a bit for our families – or at least the kids who will have to pay for this.
With all the money floating around, including $3 Billion to get old cars off the road, you would think that there might be some kind of program that would put people back to work. After all, we’ve lost about 6 Million jobs in the last year, and on the high side we can estimate that it’ll cost about $100,000 each to keep people employed for a year – just until things get going again. That would amount to around $600 Billion, or just a bit under the initial promise to places like Goldman-Sachs.
The question I always have is, “What could we get for this?” That’s where it gets interesting. We can be pretty sure that giving people jobs will help start up the critical consumer part of the economy because people who have just a little money tend to spend it a bit quicker than people who have too much. It would be good to get useful work out of people rather than handing them unemployment checks, but you don’t just employ 6M people in the Social Security Office.
If we can identify places where people can be employed in a way that can clearly be considered an investment, passing on the tab to future generations doesn’t seem as awful as it does now. Investments we know we need include infrastructure such as roads and bridges, but it can also include a lot of research in clean energy – something like an Apollo Program, which ran about $150 Billion in today’s money. Educating kids can also be considered an investment, especially if they are going to have the kind of super-productive jobs that will be able to cover this tab.
Where does money move fastest in the economy? Among those who need it the most. How much would it take to employ them all? A lot less than we’ve spent so far. What can we get for it? A different world than we have now, if we do it right.
I understand how it’s gotten difficult to track how much money we’ve thrown at this problem so far. What I don’t understand is how so very little of it has managed to go into things that make a clear difference.
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Simple…the folks that need it most don’t have highly-paid lobbysts working on their behalf and lining the campaign coffers of Members of Congress.
The last time that job programs worked was with the far flung efforts of Minnesota Governor Rudy Perpich. The world is now flat, and so are job creation schemes.
The age old technique of shaming the private sector into creating more jobs than they really need is still worth a shot.
Perpich was a real hero of mine – the guy really cared and really thought about things. Shaming them into it? Well, I’m all for it – but if people come back to you with really good points about policy and other changes that need to be made to make it happen, we probably need to give them at least a good listen.
Lobbyists? Sure, that’s a lot of it. But if Democrats don’t stand for what I’m talking about here, the party isn’t going to be in power for too long. I hope that’s obvious (but it doesn’t seem to be).
Shaming or more aptly verbally encouraging business to hire was something Bill Clinton did quite a bit of if I remember correctly. Part of me still cringes when he was losing legislative power and he wound up promoting an agenda that seemed more appropriate for a high school principal. But the guy could talk about culture and he certainly had people that hated him and his family and those who loved him just as much even with his human failings/faults. It is interesting now because his star has been eclipsed. But he was a phenom after 12 years of reagan/bushI presidency. I was one of Clinton’s early supporters in Minnesota (go figure I was also early on Wellstones wagon). I remember being at a walking caucus and trying to get one more committed caucusee so we could send 2 people on to the next level. Harkin crashed and burned. I remember back in 1997 sorta sadly thinking that this may be as good as it gets.
Anyways Perpich was certainly refreshing I think the goofy smear was very insulting. The guy certainly had a bearing up on the campaign podium especially so when he was standing next to short Paul.
Now Eric you gotta come up with some answers or the world will explode. Just kidding a little game I played as a child to make the time fly, but if you don’t get that task done an alligator will eat your foot.
I’m working on the solutions. Honest. My folks are in town and I just don’t have the time to push it all together, but I am getting to bounce ideas off new victims. Part of the problem is that I’m having trouble finding the net labor component of all manufacturing at the BLS. I know that sounds weird, but it helps me put a value on one of the things I want to do.
Anyone know the sum total of all salaries in manufacturing?
From the Bureau of Labor Statistics, the weekly annualized average wages in the Manufacturing sector (non-supervisory) in May of 2009 was $710.94. From the same source, there were 12,000,000 such jobs. If I take 12mm x $36,972 ($711 x 52), I get $443.7 Billion.
Remember, those are jobs by sector. A janitor, accountant, secretary, and internal mail clerk for a mfg co. could easily be counted within that.
There are lots of ways at calculating mfg salaries, each with strengths and flaws. Here is a link to the Labor Statistics page I got my numbers from http://www.bls.gov/ces/.
Bruce, I think that’s the number I wanted. Total Manufacturing is about $1400B, so it’s about right. Thanks!
I am not sure where you got $1400 B.
What I meant by “weekly annualized average wages” I meant during the month of May, the average weekly wages per mfg. worker were $711. Different months had higher or lower rates of manufacturing and wages (depending on where the economy stood). I annualized it at that May rate arbitrarily to the whole year (hence multiplied by 52 = $36,972). If you were extrapolating and multiplying again by 12 (for months), you were overstating the figures. It should be annually $443.7 billion, not $1400 billion.
Sorry, I was being imprecise. The total for manufacturing in the same period was 1,661B$, which is to say that wages are about 27% of the total cost.
The next problem is what do they include in “wages”? Since the CES is done by survey, I think this is take-home pay – not bennies or any other overhead.
This chart – http://www.bls.gov/news.release/ecec.t06.htm – says that it’s $32.06 per hour, and that the wages average 69.7% of the total cost including taxes and bennies.
What I’m trying to get at is this: what is the real cost for an American worker, and what can be done to reduce the overhead? I’m trying to find if there is a potential for real savings there by shifting costs for benefits to the Feds, providing additional incentives to create jobs. There may be other ways of reducing that overhead, too.
What I’m seeing is that if we could cut the overhead in half, we’d save about 15% of worker costs or about 5.7% of the cost of manufacturing overall. It’s not huge, but it’s interesting to note that we lost about 6% of all jobs in the last year – a very similar number.
Hey good stuff…keep up the good work! 🙂
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Hey good stuff…keep up the good work! I read a lot of blogs on a daily basis and for the most part, people lack substance but, I just wanted to make a quick comment to say I’m glad I found your blog. Thanks,)
A definite great read…:)
-Bill-Bartmann
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