New Laws Now Evaluated by Job Creation

Source: ROBERT PEAR • New York Times • Posted: Tuesday, January 3, 2012

WASHINGTON — After years of judging the merits of federal laws by their costs or savings, Washington is applying a new yardstick: Will they create or destroy jobs?

When the American Public Transportation Association seeks more federal money, it argues that “public transit projects will put people to work.” Specifically, it says, “Every $1 billion we invest in public transportation means 36,000 jobs.”

When Lockheed Martin lobbies for the F-35 joint strike fighter, it says the new plane will strengthen the economy by “creating direct and indirect jobs for 127,000 Americans” in 47 states.

Health care lobbyists argue that cuts in Medicare and Medicaid take jobs away from nurses and other hospital employees. Tree farmers argue that cutting forest conservation programs will destroy “good-paying rural jobs.”

With unemployment stubbornly high, jobs, it seems, can be used to justify anything and everything. But some economists and other critics say that the figures can be misleading as advocates cook up inflated estimates to make their case.

“Many economists think most of that is pretty silly,” said David Card, an economics professor at the University of California, Berkeley, who is president of the Society of Labor Economists. “It’s just a selling point. You can say anything, no matter what, creates jobs. I don’t think people should pay much attention to it.”

Sometimes opposing sides offer the logic-defying claim that only their preferred outcome would be good for jobs. Republican lawmakers, for example, criticize new environmental regulations as job destroyers, but supporters of tougher clean air rules say they will create tens of thousands of jobs in pollution control industries.

Estimates of job creation or destruction often come from economic consultants hired by groups lobbying for or against a proposal. The impact can be magnified by including the indirect effects of a proposal on other parts of the economy.

Prof. John M. Abowd, a labor economist at Cornell, said that “labor markets are hugely dynamic,” with large numbers of jobs being created and destroyed even when the total level of employment stays roughly the same. For this reason, he said, it is often difficult to tell whether spending for a specific purpose directly creates jobs.

The wireless industry wants the government to free up more radio frequencies to meet consumer demand for mobile broadband. If allowed to use those frequencies, wireless companies say, they will spend billions of dollars on wireless networks, creating more than a half-million jobs.

Similar arguments are made for legislation to crack down on foreign Web sites that sell counterfeit goods and illegally copied music, movies, television shows and books.

Copyright, trademark and intellectual property rights may sound like obscure issues in the context of jobs. But a coalition of big companies, Creative America, frames its message to Congress in a way that politicians notice: “Stop foreign Internet criminals from stealing our jobs.”

A coal-industry group, attacking power-plant rules proposed by the Environmental Protection Agency, says they would “destroy over 180,000 jobs per year.” The estimate comes from a study commissioned by the American Coalition for Clean Coal Electricity, whose members include coal producers like Peabody Energy and Arch Coal.

Not to be outdone, companies that make scrubbers and other pollution-control equipment have their own trade association, the Institute of Clean Air Companies. They support many E.P.A. clean air standards. And they say that 1.5 million jobs will be created in the next five years as a result of the new requirements.

“These are good-paying American jobs for electricians, welders and engineers,” the institute says.

The National Association of Letter Carriers, fighting a proposal to eliminate Saturday mail delivery, says it would not only degrade customer service, but also threaten millions of jobs at direct marketers, printing and publishing companies and other businesses in the mailing industry. New taxes are portrayed as job-killers, while tax breaks are defended as job creators.

To help reduce the deficit, President Obama recently proposed new fees and taxes that would raise $36 billion over 10 years from airlines and air passengers. The industry sums up its opposition in four words: “Add Taxes. Lose Jobs.”

“Proposed airline taxes are a one-way ticket to the unemployment line for 181,000 Americans,” says the Air Transport Association, a trade group for air carriers.

The National Association of Manufacturers tells Congress that higher energy taxes will lead to higher prices and “millions of lost jobs.”

The new health care law levies many new taxes. Representative Erik Paulsen, Republican of Minnesota, is leading efforts to repeal one, on certain medical devices. The tax, he says, would “eliminate more than 40,000 well-paying jobs.”

Republican candidates for president say the health law, with its requirement for many employers to provide insurance or improve benefits, puts millions of full-time jobs at risk.

On the contrary, Obama administration officials say, the law will preserve and create jobs in several ways: by providing tax credits to small businesses to make insurance more affordable; by increasing the demand for health care goods and services; and by providing billions of dollars to build community health centers and school clinics.

People often cite jobs in trying to keep their favorite tax breaks.

The National Farmers Union, lobbying for extension of tax credits for renewable energy, says, “Wind energy creates jobs.” Farmers often receive lease payments from wind energy companies that place wind turbines on their land.

A new study commissioned by the American Wind Energy Association, a trade group, says that extending a tax credit for wind energy would “create and save 54,000 jobs,” while expiration of the tax break as scheduled at the end of 2012 would cause the loss of 37,000 jobs.

Even tree farmers and their advocate, the American Forest Foundation, buttress their case by arguing that trees mean jobs.

Fearing that Congress will cut forest conservation programs in the 2012 farm bill, the foundation tells lawmakers, “Every square mile of private forest land supports five American jobs.”