Jobs, jobs, jobs. And also…

Last Tuesday President-elect Trump said, “My Administration will be focused on three very important words: jobs, jobs, jobs.” Mr. Trump emphasizes geography: American policies should encourage economic growth “right here in America.” Nothing wrong with that.

He follows a hallowed tradition of politicians emphasizing jobs and talking about the number of people employed as if it were the only measure of economic well-being. This is effective political communications about economics and quite common.

Any time a policymaker does this he or she is oversimplifying. Employment levels, that is, jobs, are an important metric of economic health. Maximizing the number of people working is a laudable goal for policy. But jobs are not the only thing we should care about. Economically we are more than just workers.

  • We care not just about how many people are working but also about how much we are earning. We are wage-earners.
  • We care not just about wages but also about non-wage benefits like employer-paid health insurance premiums and employer contributions to retirement savings. Wages plus benefits equals total compensation.
  • We care about the prices of the goods and services we buy. Those prices can be affected by the extent of domestic and international market competition and also by inflation. We are consumers.
  • We can only spend what the government doesn’t take from us, so we care about the taxes we pay. We are taxpayers.
  • On the flip side, we may receive cash or other transfer payments from the government. Some of us are recipients of government benefits.
  • And since many of us own financial assets we care about economic growth and its effects on financial returns. We are investors.

Politicians talk about economic policy as if having a job is the only thing that matters to you. While being employed is critical to your economic status, you are more than just a worker.

When thinking about economic policy, each of us is a worker and a wage-earner, a consumer, a taxpayer, and often an investor and a recipient of government benefits.

OK, but so what? Does it really matter if politicians oversimplify and talk only about jobs, rather than about jobs and wages and compensation and prices and taxes and benefits and market returns?

It matters if […]