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Monday, August 08, 2011

The 39,000 Jobs Hoax

By Keith R. Schmitz

The Walker administration and the six Republican state senators involved in this week’s recall election are throwing out the claim that the changes they have brought to state government have led to the creation of 39,000 new jobs. The media is allowing them to make that brag as well.

The six GOP targets have to sell this idea. Their jobs are on the line and if there is a metric people are looking at for all politicians right now, it is job creation. During last week’s debate in Menomonee Falls hardly ten minutes went by without Alberta Darling bringing up these job numbers and how wonderful their programs are.

For this discussion, let’s not talk about the quality of these jobs. After all, Walker chased away what would have been 5,000 good paying jobs with a future connected with extending the high-speed rail line before he even took office.

The question here is how can Walker, Darling, et al tell you that they helped create these jobs, when the realities of business tell you otherwise.

He Swears the Jobs are His

So we are to believe that the moment Scott Walker raised his right hand to take the oath of office for Governor, those jobs started popping up like mushrooms?

Usually businesses look for new hires when they have something for them to do. It would be mind stretching to think that just because someone is a fanatical Walker supporter that they would be bringing people on just because Scottie is at the helm. Not these hardnosed captains of industry.

For existing businesses, new faces generally start appearing only after a business sees a rise in revenue thanks to customers walking through the door or the sales force putting orders on the books. The evaluation process often takes months for a number of reasons and even then it’s not like people just start popping up, because recruitment takes some time.

Sure there can be new businesses opening their doors but even the planning for those is months in the works.

Origin of the Jobs?

The point is that the Walker/Darling/GOP assertion of creating 39,000 new jobs since January is ludicrous, given the way business works. It is also ludicrous because an administration has to do something to earn the credit for job creation.

A couple of times during the debates, Darling mentioned that 85% of Wisconsin business leaders said that Wisconsin is heading in the right direction. Make that 85% of the membership of WMC, a wholly owned subsidiary of the Republican Party.

Now if anyone would be hiring because of giddiness over having Walker in office, it would be them. It would be interesting to find out how many of these companies have brought on new employees since they are among the state’s very largest companies, though we would never know when they actually started to think about adding these jobs.

Where Credit Is Due

The GOP crowd may not like to see this, but just about all these jobs probably began their gestation period back during the Doyle administration, with a big help from the Obama stimulus. There are in fact several companies here in Milwaukee that were able to launch new ventures thanks to stimulus funds, ventures that included high paying jobs.

Again, raising your right hand doesn’t count. In reality there was nothing Walker and the GOP did until he signed the budget back in late June. So even then, the clock didn’t start ticking until ink hits paper, so we are still many months out before we know if the plan works.

In between was the signing of the so-called budget repair bill, not a big booster to business. In fact it could be argued the other way. State employees make up 18% of the state work force, and with this large of population saying good bye to a large part of their salary; a number of stores, restaurants and other businesses will see a significant drop off in sales, especially in cities that have large concentrations of public employees such as university towns and places the have correctional facilities.

Let’s get back to the timeline. Walker signs the budget in late June, and any job creation they could take credit for would be legitimately in Fall.

May Not Be a Merry Christmas

But even with the holidays coming, the job picture may not be so rosy. In fact there are reports that this year parents have not let loose with back to school spending.

By then the recalls will be history, but we have some big events to look forward, mostly the prospect of a Walker recall, and his buddies in Congress have not been too helpful.

With the new Congress sworn in, there was as some pundits put it, “a lack of interest for more stimulus.” For many like our US Senator Ron Johnson who proclaimed that “the stimulus didn’t create a single job”, the country is finding out what the real impact of the stimulus is by its very absence. Johnson and his cohort ripped the tubes out of the patient just as the economy was recovering.

Most recently there is the horrible debt ceiling agreement. The right wing loves to assert that government jobs are not real jobs. The problem is that these people are being paid real money, which flows into the real economy and cut off that flow, the economy suffers. Many economists are predicting the loss of hundreds of thousands of jobs once the debt ceiling agreement kicks into action.

Many of these economists are saying that extreme cutting is the last thing this economy needs. And we will soon find out if they are right. That may be by the end of the year, and that’s not good news for Walker.

There is speculation about when the long anticipated recall of Walker kicks into gear, ranging from around the end of 2011 to the 2012 general election. Either way, if the double dip recession hits, probably nothing Walker has done will avert it. Worse, Walker’s budget shredded the social safety net in Wisconsin, amplifying the misery – and heightening the anger against him.

If things play out, it will be Walker who will be joining the ranks of the unemployed, needing to get his first real job since college.

This is of course known in the trade as poetic justice, except we will be the ones paying the price.

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