Yes.
Teachers, firefighters and police officers should not be cut.
Politicians and pundits have finally gotten the message from the American public — jobs are the No. 1 priority. During the Great Recession and the weak recovery over the past two years, the unemployment rate has roughly doubled.
It would be much worse if millions of people did not find their prospects so dim that they just gave up looking and thus are not counted as unemployed in official statistics.
Given the excruciating lack of jobs, what is the proper role of government? One influential school of thought is that government’s role should be a bare minimum; it should get out of the way of business. This school asserts that the Obama administration tried a massive stimulus program and that, given the continued lack of jobs, it failed.
However, my belief is that the government can play a positive role in sustainable job creation; it just has not yet taken the needed steps.
First, after an initial boost of federal jobs, there are actually fewer total government workers now than before the stimulus. Such jobs have fallen by 2.7 percent since the month before the stimulus was enacted. Federal jobs did increase a bit, but now are only 1 percent higher than in February 2009.
If massive stimulus spending was implemented, I concede that most of the job creation would be temporary. But there is a role for government, including state and local, to create new, permanent jobs.
Government should be adding jobs, not cutting, in professions that will help Americans compete and stay safe, such as teachers, researchers, firefighters and police officers.
Reducing state and local jobs in education by more than 250,000 since February 2009 seems particularly counterproductive. The federal government can help cash-strapped localities such as Atlanta.
Unemployment rates in Atlanta and Georgia exceed the national average. The local implications of black male unemployment, twice the overall average nationally, are excruciating.
Private sector permanent job creation is desperately needed, but even here the government can help. First, small business has been starved for credit since the financial crisis hit.
Small business has and can be the engine of job creation, but not without credit. Banks are just sitting on excess reserves — the government must use carrots and sticks to get credit flowing to entrepreneurs.
Second, while many government regulations — such as those to curb excesses on Wall Street and subsequent bailouts by the taxpayer, or those which protect food safety — are needed, others could represent job-destroying overreach. An example could be the administration’s attempt to stop Boeing from creating jobs in South Carolina.
Ultimately, fierce global competition for jobs is here to stay. We may not need bigger government, but we will need smarter, focused government at all levels.
Jeffrey Rosensweig is an associate professor of international business and finance at Emory University.
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