Robert Shiller pointed out in an undernoticed New York Times op-ed a couple of months ago that the stimulus cost so much per job because it was capital-intensive work. He noted that the government could create one million jobs paying $30,000 for $30 billion. There are currently about 15 million people out of work. To be crude about it (obviously, it’s much more complicated than this), you could employ them all for $450 billion, or not much more than half of what the stimulus cost. Shiller:
Two friends of mine, both economists, came upon a stimulus project recently that illustrated the problem. On a Wyoming highway they saw a sign that read “Putting America to Work: Project Funded by the American Recovery and Reinvestment Act” and prominently featured a picture of a worker digging with a shovel. Out on the road, there was plenty of equipment, including a gigantic asphalt paver, dump trucks, rollers and service vehicles. But there wasn’t a single laborer with a shovel. That project employed capital, certainly, but not many human beings.
So here’s a proposal: Why not use government policy to directly create jobs — labor-intensive service jobs in fields like education, public health and safety, urban infrastructure maintenance, youth programs, elder care, conservation, arts and letters, and scientific research?…
Big new programs to create jobs need not be expensive. Suppose the cost of hiring a single employee were as high as $30,000 a year, several times typical AmeriCorps living allowances. Hiring a million people would cost $30 billion a year. That’s only 4 percent of the entire federal stimulus program, and 0.2 percent of the national debt.
Why don’t we just do it?
I think you might find the answer to that from Jon Stewart, who recently told New York that “Obama ran as a visionary and leads as a legislator.”
But how long would it take to ramp up a program to pay people to clean up parks, document the country, paint roofs white, tutor kids, plant trees, help nonprofits (including churches), or other non-capital-intensive work? I suspect the answer would be seriously depressing.
And that’s a real story.