The Cost of Trickle-Down Government Job Creation: $1.5 Million Per Worker

• Where is it all going, when the annual average wage is no higher than $50,000? Obviously, it must be going to the so-called 1 percent group or what the Republican Party calls the job creators, i.e., the mostly male CEOs and other executives of large corporations.
• Robert Reich | Restore the Basic Bargain

Ravi Batra, Truthout

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Suppose I were to tell you that for the past two years the federal government has been spending nearly $1.5 million to create one job, what would your reaction be? Would it be one of disbelief and bewilderment? But suppose I were to prove my statement by citing official data, then how would you react? Well, you make up your own mind, but my response is that the administration's advisers should rethink their approach. Does it make sense to spend so much money to generate one job when the average wage is less than $50,000 per year? In fact, this policy is so foolish that it might even be better just to hand over the average salary to the unemployed so they stay calm, make both ends meet and create consumer demand.

Let me prove my point. The administration's tack is that we should keep spending money at the current rate to preserve jobs, even though the annual federal budget deficit has been around $1.4 trillion over the past two years. In fact, the government even plans to increase its shortfall by raising the size of the payroll tax cut. It seems apparent that the main purpose of excessive federal spending is to preserve or generate jobs. This is a point emphasized by every American president since 1976, and especially since 1981 when the federal deficit began to soar. This is also how most experts defend the deficit nowadays.

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Related:

Robert Reich | Restore the Basic Bargain, Robert Reich, Robert Reich's Blog
For most of the last century, the basic bargain at the heart of the American economy was that employers paid their workers enough to buy what American employers were selling. That basic bargain created a virtuous cycle of higher living standards, more jobs, and better wages. The basic bargain is over - not only at Ford, but all over the American economy.