Rising Stimulus Lifts all Ships
I’ve written before about how much I enjoy/learn from Robert Reich’s posts. And he has another good one out, expressing concern that the benefits of the proposed stimulus might falls disproportionately to current highly-paid and desired professionals and to the vastly white and male construction industry.
In his words:
“But if there aren't enough skilled professionals to do the jobs involving new technologies, the stimulus will just increase the wages of the professionals who already have the right skills rather than generate many new jobs in these fields. And if construction jobs go mainly to white males who already dominate the construction trades, many people who need jobs the most -- women, minorities, and the poor and long-term unemployed -- will be shut out.”
Reich has his own answers and solutions to the problem, and they are good. But in my opinion his concerns might be over-stated. One of the reasons for a stimulus, is the economic multiplier that is applied to government investment and spending (estimated to be significantly higher by the way then a tax cut).
The basic idea is that if you have more money in the pockets of people, by paying them to build bridges, install broadband infrastructure, etc, then they are more likely to spend money on other services and employer other people who spend money on other services and so on. As the stimulus takes effect, and new investment and spending draws in high wage professionals and the existing stock of white male construction workers, a hole in the economy is going to develop in jobs that these people once filled and those who step in will inherently be from the stock of non-white and less highly compensated labor. This will provide incremental benefit to these groups, although certainly not to the extent that the previously privileged will enjoy.
If we had the luxury of time, I would say that we should take the time to train this non-privileged pool of labor. But we don’t have time, we need the right people and the best trained people to step in an do the job right the first time. But isn’t that business as usual? Aren’t we just going to be perpetuating the current inequities in the system? Isn’t that what we elected Obama to change? The key here I think is maintaining a long-term perspective. Today’s minority waitress should be able to
go to subsidized night school to teach her how to maintain and monitor solar panels for the power company, the immigrant landscapers should be cross trained (at the expense of the telcos) in installing underground, rural broadband connections.
As money flows out of the gov’t it is critical that we do things fast and right, it is also critical that we use this challenge and opportunity to change the way things are done and bring new opportunity to underprivileged classes. But this should be done in concert and as a part of investment, not as a pre-cursor.