I submit that no government really knows how to create jobs, with the exception of bureaucracy jobs and military jobs. Those can be created by fiat.
Real first and second-order jobs, those that make food, housing, and the support infrastructure for those jobs, are harder to create. Manufacturing jobs seem to be the hardest, military equipment excluded.
Decades ago there was a comment in the Star that it took about $150K to create a single manufacturing job. I suspect that number is in the million dollar range today. I’m thinking of a job at Honda or General Motors in manufacturing.
Having defined first order jobs as food and shelter, and second-order jobs as those enabling the first, including transport, power, health and education, we have tertiary jobs that make real products that can be sold to those with food, shelter, and the ability to move about freely.
That leaves the fourth-order jobs, the so-called service industry. Be it noted that lawyers and politicians do not consider themselves to be service workers. They are an elite fifth column, so to speak.
One fallacy is that it is OK for most of the jobs in the economy to be service sector jobs. A thought experiment will dispel this misconception.
I cut my lawyer’s hair for twenty years. He defends me in court for twenty minutes. As a result, we both can buy food, I can buy scissors, and he can purchase a new briefcase. Obviously not. If we just traded the services, there would be no scissors and no briefcase. And no food. We need additional income to purchase those things.
I wash my neighbour’s floors for twenty years. He advises me on retirement investments. As a result, I can buy food and a mop, and he can buy food and a new computer. Obviously not. As above, service sector activity does not create physical products.
If all work was service-sector work, we would have nothing but services. No food, no shelter, no electricity, no cars.
The above, admittedly simplified, examples show the fallacy of creating service sector jobs. Eventually somebody has to make real food, real shelter, provide real transportation, and make real toys and furniture. Such economic activity can create a market for service sector jobs. Creating jobs for lawyers is a topic for another post.
The point here is this: creating real jobs in the first, second, and third order is what we need. Second-order jobs do come out of infrastructure spending. Third-order jobs are vanishing as we buy our goods from other countries, instead of making them ourselves.
Service sector jobs, while important to those that hold them, don’t count in as fundamental ways for the economy as those that produce physical products.
We need a government that understands the priority of third-order jobs. I submit that the leverage is in the second-order, health and education being the key functions. We need a government that makes an educated workforce a likelihood, not the right of the elites. We need a government that makes a healthy population the norm, not just for the elites. Then we will have healthy and educated individuals who can figure out how to create those third-order jobs for themselves and their employees.