All jobs are good, but some are better than others. A part time job at or near the minimum wage for a high school student or drop-out can be a good job for such person. Hopefully, it will lead to advancement. The low-income employee can be expected to promptly spend all of the take home pay which increases the GDP. However, such spending, mostly on food and clothing, creates only a minimal and meaningless multiplier effect and the low compensation results in the payment of negative income taxes.
Other jobs that pay salaries that require the employee to pay federal income taxes are much more desirable from a macroeconomic prospective. Individuals with tax-paying jobs buy cars, homes and other products and services, while people with low paying jobs generally do not. The increase in demand for such products and services leads to hiring additional workers and capital spending each of which generates additional tax-paying jobs.
The greatest failure of the Obama stimulus programs is that they failed to create enough federal income tax paying jobs. A large portion of the tax rebates was used to reduce debt and created no jobs. The effect of Obamacare on employment is only beginning to be understood. It seems to be encouraging part-time jobs (to avoid Obamacare requirements) that are reducing head-line unemployment but are not materially increasing aggegate payrolls or federal income tax revenues.
Welfare spending improves the lives of the recipients, but does not create many tax-paying jobs. Food stamps are generally spent at groceries or discount stores that might hire a clerk or two in a low-paying job. Farmers, overseas clothing manufacturers and their supply chains increase their sales, but hire few additional domestic workers. Insignificant tax revenue increases result from welfare spending. The GDP goes up on a better than 1 to 1 ratio because all of the welfare payments are spent almost immediately and the added low income wage earners spend their earnings. However, since almost no federal income tax revenues are generated, the National Debt grows by a large percentage of the welfare payments.
The size of the National Debt matters. It is true that as long as short term interest rates remain near zero, the carrying cost of the National Debt remains negligible. However, if short term interest rates rise so will the carrying cost of the National Debt.
Transportation infrastructure construction projects create good tax-paying jobs. The states are broke and must balance their budgets. They are unable to obtain funding for such projects. As a result, funding for such projects must come from the US government or other sources. The Obama stimulus programs should have allocated hundreds of billions of dollars for transportation infrastructure construction loans or subsidies. Instead the money was spent in ways that didn’t generate tax revenues.
We still need hundreds of billions of dollars to be spent on transportation infrastructure construction. The Obama administration has called for a new stimulus program for a fraction of the amount needed. There is a zero chance that the Republicans in the House of Representatives will approve such spending. The President squandered his chance to adequately finance transportation construction during his first two years in office. He blamed all of his economic failures on the policies of George W. Bush and the refusal of Republicans to cooperate. As a result of the multiple scandals, confusing and misleading statements about Obamacare and disgraceful theatrics in dealing with the sequester, President Obama and his advisors have lost a great deal of credibility among voters. Now, ridiculous arguments by Republicans favoring austerity measures, like the sequester, that is causing harm to our economy, seem more credible to voters. Too many people think our economy is growing and it is time to try to reduce deficit spending.
My book, Perpetuating American Greatness After The Fiscal Cliff introduces Jump Start America Bonds. Such bonds that will be purchased by corporations and indviduals will have tax features that enble them to be purchased virtually risk free. They will enable the funding of hundreds of billions of transportation infrastructure construction projects. Such bonds will only come into being if Congress changes the federal corporate and individual estate tax laws to permit and encourage their sale. The required changes will be revenue generating for the US Treasury almost immediately. They should sail through Congress and be signed into law by the president. As I have previously written on this website, Jump Start America Bonds represent the perfect economic stimulus.
Housing construction and renovation are another source of good income tax paying jobs. The great wealth of private equity and foreign investors appears to have temporarily stabilized the housing market. A limited number of good tax-paying jobs are being created and auto sales have benefitted. Nevertheless, the foreclosed homes have devastated the middle class and increased bank losses. An increase in home prices means that some homes are no longer underwater, but the recovery in prices is not yet significant. It may not continue if mortgage rates keep going up. Single family homes are not suited for the rental market. There is a better way to help the housing recovery. It entails giving mortgage relief to homeowners as described in my book Perpetuating American Greatness After The Fiscal Cliff.