11.25.2008

JOB CREATION

Apparently when the government is shopping, jobs are expensive. Greg Mankiw's Blog puts it at $280,000 per job, if we take Obama's estimates of $700 billion and 2.5 million jobs seriously. Meanwhile, the US Conference of Mayors [warning: large pdf file] has compiled a "ready to go" list of 4600+ infrastructure projects totaling $25 billion and creating 261,000+ jobs, which works out to about $95,000 in government expenditure per job created.

Of course, what the government is paying for when it tries to stimulate the economy is more than just the salaries of workers: the end product of such expenditures is such things as institutional or physical infrastructure, whether new or rebuilt. Still, I can't help but think of old grant proposals I used to write for my old employer, The Enterprise Center, where I am currently on the board.

There, our goal was to support entrepreneurs whose emerging ventures were part of the true engine of job creation in our country. At some point, we estimated (and I forget how, so you'll have to excuse me) that we were helping create jobs at something like $10,000 per. And while our efforts didn't lead to other outcomes like a stabilized banking structure or a reconstructed bridge, it did have its own, no less important effects, like the pride of the entrepreneur in building something from scratch, or enhanced conversations around dining room tables in inner city homes, or the ability to pass onto the next generation the valuable asset of a business and a brand.

There's nothing inherently magical about small businesses; big businesses create jobs and wealth, too, and have both advantages and disadvantages over small businesses. But here's hoping that the Obama administration, in its efforts to stimulate the US economy, doesn't dull the efforts of entrepreneurs to do their part to create jobs, compete in a global economy, and accumulate wealth.
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