Today, Congress, by a vote of 68-29, passed the Jobs Bill. Just to refresh your memory, the jobs bill promises the following:
- Businesses that hire unemployed workers will be exempt from paying the 6.2% Social Security payroll tax through December 2010
- Businesses that retain these employees for a full year receive an additional $1,000 credit/worker
- $18 billion in tax breaks and a $20 billion cash infusion into highway and transit programs
The goal of the bill is to stimulate hiring by offering incentives to businesses, and by subsidizing highway and mass transit construction projects to stimulate hiring by the states or state contractors. Supporters say the bill is a small step in the right direction; opponents say it’s just more government spending that will create few jobs and cost taxpayers more money.
The costs of the bill will be covered by cracking down on tax havens, and via new or additional taxes on taxpayers to make up for the shortfall in Social Security tax revenues. The bill is expected to create about $13B in debt over the coming 3 years.
We at Careersthatdontsuck.com think the Jobs Bill is a great notion, but the truth is that no bill can “create” jobs. Jobs (for the masses) are a trickle-down phenomena created only after the big money swimming around at the top of our economic fishbowl starts to settle and sink to the bottom–a new worker is hired, she spends money at local businesses, local businesses hire new workers and order new inventory, the inventory manufacturers hire new workers to meet the new demand, new businesses crop up to meet the new demand for inventory, and new jobs are created all along the way.
Unless we would have Congress or the President mandate that Goldman Sachs use its $16.2B bonus pool to hire new line workers, or JP Morgan Chase to give its $9.3B bonus pool to small businesses that can’t meet demand for their products without a capital infusion, then it’s unrealistic to believe that any bill–Democrat- or Republican- sponsored–will actually create jobs.
Given this, do you care that the Jobs bill has passed?