A bipartisan jobs bill passed the Senate this week and is headed to the House with the hopes of many unemployed riding on it.
Sounds good. Let’s create more jobs.
However, an economist says the bill is likely to create 250,000 jobs. That is less than 4 percent of the 8.4 million jobs lost in the recession.
This is hardly worth shouting about.
The bill has two major provisions.
It would exempt businesses hiring the unemployed from the 6.2 percent Social Security payroll tax through December and give them an additional $1,000 credit if new workers stay on the job for a full year.
The bill would extend highway and mass transit programs through the end of the year. The bill would put $20 billion into those programs in time for the spring construction season.
These incentives are nothing more than packing peanuts in a huge box of wishful thinking.
New jobs must be well paying and sustainable to have any lasting measurable effect on our economy.
Having a low paying job for a year or two is not going to help many for very long.
Businesses are not expanding. They are cutting jobs or desperately clinging to the ones they have now.
Businesses need a reason to create jobs that will be around for years — not jobs that might go away in a year without federal financial support.
Saving 6.2 percent on Social Security payroll tax through the end of the year is hardly enough to justify creating a well paying job.
And $1,000 is not nearly enough to justify creating payroll expenses that will have to be met year after year.
Congress would be better off creating an environment conducive to expansion and growth.
New employees would generate income tax revenue that would offset the loss of revenue from tax breaks in a time when government needs every penny.
