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01/29/2010: "The thing about creating jobs"

Just the other day, a so-called economist from one of our big five banks was indicating he now estimated there would be 100,000 jobs created in 2010. Well, I'm starting to get a little irked with this notion of "job creation".

On the first term, "job", without a explanatory definition the term is fairly ambiguous. Do you mean full time jobs or part time jobs? Permanent jobs or temporary jobs? Low paying jobs or high paying jobs? Unskilled labor, skilled labor, or professional jobs? Maybe most importantly, are these filled by people who already have a job, or are they second or third jobs?

Does it matter? Of course it does. I'm sure that the economist had a fairly concrete idea what he meant by a "job", but if you asked 100 individuals what constitutes a job, you would probably find numerous conflicting definitions based on the above distinctions.

There is also an implication that 100,000 jobs created means that there will be 100,000 fewer unemployed people. Given the last question above, this is not necessarily the case. Many people in lower paying fields work multiple jobs, and most families have multiple workers.

The second term is much more specific, but in its specificity it is more misleading. A job is an arrangement between two parties: one doing some work and the other providing compensation. It requires either agreement between both parties or coercion against one or both of them. It can't be arbitrarily created. Governments like to say they have created jobs but, much as they want to make us believe, you can't just wave a magic wand or sign a paper and create jobs.

It also neatly avoids some of the economic implications with the terminology. Somebody has to compensate the job workers. This compensation has a cost, and that cost lasts as long as the employment lasts. A one-time transfer of money cannot last.