Obama Jobs Speech: Nothing New, Is Incidental to Creating Jobs

President Obama’s speech to Congress hewed closely to the details that had already been leaked, save for the dollar amounts, which were considerably larger. Even so, the $450 billion price tag is somewhat misleading in that much of that is not new spending or new tax breaks but rather an extension of breaks and unemployment benefits that are already in place. Given that payroll tax cuts have not generated employment in the past two years, it’s is a stretch to see how they will suddenly do so now. As for unemployment benefits, they are a vital safety net, but that isn’t the same as job generating.

It’s also a challenge to see how the other provisions will change the employment landscape. The tax breaks for businesses to hire workers who have been looking for months are generous, but the employment conundrum is that companies haven’t needed to hire workers—not that they simply need incentives to hire workers. Even increased demand—for manufactured goods for instance—doesn’t necessarily trigger a need for more workers. Many companies can increase output with their current work force.

The other elements—cleaning up the corporate tax code, passing free trade agreements, reforming Medicare and increasing taxes on the wealthy—have been floating around Washington and aren’t new. They are simply folded into a jobs act. Each element might be worthy, but again, the link between those reforms and new jobs is tenuous at best.

What Obama offered was a series of initiatives, all of which are already on the table. Each may or may not be worthy, but for employment, they are all largely incidental. It would have been more honest to acknowledge a changed system and the limitations of government to generate jobs, while touting the ability of government to create cushions, offer a safety net, and allocate resources. It would have been more effective to begin an honest conversation about employment and the degree to which unemployment hits the less educated and young men far harder than anyone else.

Tonight we heard an impassioned speech. We needed more.