Governors can create jobs: lousy ones
Perry and Romney can duke it out over who created the most jobs, but governors have as much influence over job growth in their states as roosters do over sunrises.
States don鈥檛 have their own monetary policies so they can鈥檛 lower interest rates to spur job growth. They can鈥檛 spur demand through fiscal policies because state budgets are small, and 49 out of 50 are barred by their constitutions from running deficits.
States can cut corporate taxes and regulations, and dole out corporate welfare, in efforts to improve the states鈥� 鈥渂usiness climate.鈥� But studies show these strategies have little or no effect on where companies locate. Location decisions are driven by much larger factors 鈥� where customers are, transportation links, and energy costs.
If governors try hard enough, though, they can create lots of lousy jobs. They can drive out unions, attract low-wage immigrants, and turn a blind eye to businesses that fail to protect worker health and safety.
Rick Perry seems to have done exactly this. While Texas leads the nation in job growth, a majority of Texas鈥檚 workforce is paid hourly wages rather than salaries. And the median hourly wage there was $11.20, compared to the national median of $12.50 an hour.
Texas has also been specializing in minimum-wage jobs. From 2007 to 2010, the number of minimum wage workers there rose from 221,000 to 550,000 鈥� that鈥檚 an increase of nearly 150 percent. And 9.5 percent of Texas workers earn the minimum wage or below 鈥� compared to about 6 percent for the rest of the nation, according . The state also has the lowest percentage of workers without health insurance. Texas schools rank 44th in the nation in per-pupil spending.
The Perry model of creating more jobs through low wages seems to be catching on around America.
According to a report out today from the Commerce Department, the median income of U.S. households fell 2.3 percent last year 鈥� to the lowest level in fifteen years (adjusted for inflation). That鈥檚 the third straight year of declining household incomes. Part of this is loss of jobs. Part is loss of earnings.
More and more Americans are retaining their jobs by settling for lower wages and benefits, or going without cost-of-living increases. Or they鈥檝e lost a higher-paying job and have taken one that pays less. Or they鈥檝e joined the great army of contingent workers, self-employed 鈥渃onsultants,鈥� temps, and contract workers 鈥� without healthcare benefits, without pensions, without job security, without decent wages.
It鈥檚 no great feat to create lots of lousy jobs. A few years ago Michele Bachmann remarked that if the minimum wage were repealed 鈥渨e could potentially virtually wipe out unemployment completely because we would be able to offer jobs at whatever level.鈥�
I keep on hearing conservative economists say Americans have priced themselves out of the global high-tech labor market. That鈥檚 baloney. The productivity of American workers continues to soar. The problem is fewer and fewer Americans are sharing the gains. The ratio of corporate profits to wages is the highest it鈥檚 been since before the Great Depression.
Besides, how can lower incomes possibly be an answer to America鈥檚 economic problem? Lower incomes mean less overall demand for goods and services 鈥� which translates into even fewer jobs and even lower wages.
In short, the Perry (and Bachmann) model of job growth condemns Americans to lower and lower living standards. That鈥檚 nothing to crow about.
