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Is Adding Jobs In Government/Education/Health Care A Good Thing?

20 February 2010 16 Comments

If you’ve followed the jobs numbers by sector over the past year or so, you probably noticed that there are primarily three areas that have been adding jobs while the other areas shed jobs like crazy.  The areas adding jobs are government, health care, and education.  Maybe you can lump those three areas together, but for this article, we’ll leave them separate.

I once had an argument with somebody over whether or not this “growth” in these areas is a good thing.  The person I was arguing with was trying to explain to me that the education sector growth should be viewed as “economic growth.”  This ludicrous  remark just shows that maybe our education sector needs to be abolished due to the clear failure of educating this person on anything having to do with the economy and the way things work.

The reality is that adding jobs to these areas should be viewed as necessary when conditions warrant it and ONLY when conditions warrant it.  Let me explain using the following example.  Consider your personal finance situation.  You make a set amount of money from your job and have to use some of that money toward your expenses.  There are things in your life that you need to spend money on, like medicine, books, an accountant, etc.  You know full well that you only want to allocate as much money to these areas as you NEED to based on your needs.  You don’t view adding money to these areas as a good thing, but as a necessary evil to get by in life.

We should view adding jobs to government, education, and health care the same way: a necessary evil.  The problem is that people view jobs as the ultimate goal.  If we have jobs we have a good economy.  That is completely wrong.  If everyone dug holes and filled them in over and over again, we’d have employment, but a terrible economy.  You must distinguish between jobs and productive jobs.  The goal is productive jobs and a productive economy, not jobs for the sake of employment.  Additionally, we need to view people as resources.  Add these two ideas together and you’ll see that we want to allocate as many resources as possible to productive means in order to have a growing, sound economy.

Yes, we need to allocate some resources to government, health care and education in order for society to fuction soundly, but allocate too many to these areas and we lose precious productive resources.  Capital allocated towards non-productive areas means we can’t allocate that capital towards productive areas that will bring economic growth and wealth into the country.

For years, we have been losing productive jobs (manufacturing is the biggest example) and replacing them with non-productive jobs.  This is a trend that will lead toward economic collapse (especially when you factor in the debt levels and other factors).  In order to change the trend, we have to stimulate real business to create productive jobs.  We need manufacturing to return to America.  How can we do this?  We need to create an environment where businesses will want to operate here.  Lower corporate taxes is a good place to start.

16 Comments »

  • Tom said:

    I don't think that your argument necessarily holds water. Education can be a productive pursuit if it builds valuable human capital. Likewise health care can be very productive by keeping older (and very experienced) individuals healthy and therefore in the workplace. Government as a category is bit too broad for me to make any comment on.

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