Temp Employment Not Up

Regulatory UncertaintyOn Tuesday, I wrote about how we all are job creators when we buy anything and that because the poor spend all of their money just to get by, they are better job creators than the rich: A Million Poor Job Creators. In that article, I discussed this ridiculous idea that conservatives love to throw around that regulatory uncertainty is what stops companies from hiring: “And it is certainly not the case that an employer worries about the cost of an employee one or two or three years from now. If the employee is no longer a profitable investment, the employer will just lay him off.”

Dean Baker, one of the most astute observers of the economy, wrote an article today about the defense industry’s media lobbying efforts that imply that cuts to military spending will be worse than cuts in other government programs. In fact, they would be better because defense contracting is more capital intensive and thus creates fewer jobs per dollar spent. But he ended the article talking about the uncertainty claim of the free marketeers:

If uncertainty were affecting employment we should expect a sharp rise in the ratio of new temp workers to new workers overall. We don’t see this.

Of course, I’m not suggesting that facts will get in the way of a good business lobby meme. But you might want to remember it the next time some idiot trots out the “Businesses aren’t hiring because of uncertainty!” madness.


Jan Eberly has a really good and thorough discussion of this over at the Department of Treasury. If you are interested in this stuff, I recommend checking it out.

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About Frank Moraes

Frank Moraes is a freelance writer and editor online and in print. He is educated as a scientist with a PhD in Atmospheric Physics. He has worked in climate science, remote sensing, throughout the computer industry, and as a college physics instructor. Find out more at About Frank Moraes.

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