During this time of relatively tight labor market conditions and soaring prices (or “inflation” as it’s simplistically referred to), something remarkable is happening. Pundits, executives, and even a few politicians are openly saying that we need to make more people unemployed — that a lack of joblessness is a problem that must be rectified.
Lawrence Summers, the former chief economist of the World Bank who has served in roles in the Clinton and Obama administrations and has the ear of Biden’s White House, made this point on January 6. Interviewed against a background of what appears to be a luxurious tropical setting, he praises the Federal Reserve for drawing closer to his viewpoint. “They explicitly recognize that there’s going to need to be increases in unemployment to contain inflation,” he says, referring to the Federal Reserve’s efforts to spur a recession and increase unemployment by raising interest rates.
“They explicitly recognize that there's going to need to be increases in unemployment to contain inflation,” says @LHSummers when discussing the Federal Reserve and the US labor market.
— Bloomberg TV (@BloombergTV) January 6, 2023
One of the most brazen remarks came on December 22, when Jackie Cavanaugh, portfolio manager for Putnam Investments, went on CNBC’s Squawk Box to argue that increased job and financial security for regular people will create a “slog” for the economy during the first half of 2023. “They have a job, and they have confidence they can get another job if they need to. So that’s a really tough nut for the Fed to crack,” she said.
The clip went viral, likely because of the matter-of-fact, unempathetic tone in which Cavanaugh called for mass unemployment and destitution. But her message was hardly unique and, in fact, echoed statements made by President Biden’s own Fed chair, Jerome Powell.
“Reducing inflation is likely to require a sustained period of below-trend growth, and there will very likely be some softening of labor market conditions,” Powell stated on September 21, 2022, using economics jargon to refer to reduced wages and increased unemployment.
There was no mistaking the upshot of what he said. “Buckle up, America: The Fed plans to sharply boost unemployment,” read a CBS News headline a few days later.
The highly disputed economic theory behind such policies is that, when not enough people are out of work, wages get too high, which means that companies are forced to hike their prices, and inflation ensues. In fact, US wages lag behind inflation, companies’ price hikes are well above the rate of inflation for wholesale products, and many corporations are profiting handsomely from the current economic environment. Perhaps most importantly, when workers are less worried about losing their jobs, they can be more emboldened to exercise their power on the job, including by unionizing their workplaces — something the owning class is firmly against.
No matter the justification, the fact that powerful people are pushing for increased joblessness as a “solution” to inflation should, in itself, set off every alarm about our economic system. Each new person who becomes unemployed represents a life upended, possibly thrown into destitution or even premature death. Studies show that unemployment is associated with increased death rates, declines in mental and physical health, and heightened relative risk of suicide. In a country where pandemic-era expanded unemployment insurance has dried up, and health insurance is tied to employment, those thrown out of work have little social safety net to fall back on.
These are not just numbers on a spreadsheet — these are lives. That they are treated as surplus, or even dispensable, is a damning indictment of our economic system.
But there is another reason why the current discourse is so unnerving: “Job creation” is the holy grail of US politics. It is the thing that every politician says they do, that every pundit says they support, that every CEO says their business provides. It is the ultimate trump card, the way to win any argument in Washington. Capitalizing on the essential need under capitalism that the vast majority of us have — that to feed ourselves, keep a roof over our heads, and take care of our families, we need jobs — the idea of “job creation” is used to justify some of the most violent and destructive systems on Earth.
We could be creating jobs to make the world a more just, more democratic, and more dignified place for everyone. We could be creating green jobs to repair and prepare for past, present, and future extreme weather events; or hiring more nurses and teachers at underfunded public schools; or expanding our public health infrastructure to treat COVID-19 and prepare for future pandemics.
But for the most part, that kind of job creation doesn’t happen in the United States. Instead, we get job creation to keep building prisons, even amid growing concern about the racism and cruelty these institutions inflict; to continue extracting fossil fuels, even as scientists warn of catastrophic, existential consequences; or to keep manufacturing weapons used to inflict mass atrocities in countries like Yemen.
When used to justify investments in the security state, or to serve the interests of capital, job creation is essential — it is the highest good. But when workers get too much power, or are not quite precarious enough for the likes of the owning class, jobs become the problem, and Americans are deliberately thrown out of work.
This seeming contradiction at the heart of US politics is, in fact, no contradiction at all. Both orientations advance a reactionary political project, serve the interests of the rich and powerful, and ward off more liberatory ways to envision dignified labor and worker power.
Always “Creating Jobs” for War-Makers and Polluters
This orientation is on full display when it comes to the military industry. “Job creation” has long been used to justify massive weapons contracts — and to override concerns about how those weapons will be used.
During his administration’s escalation of the war in Yemen, former president Donald Trump touted a massive 2017 arms deal with Saudi Arabia, the country leading the onslaught, by repeatedly claiming it would create five hundred thousand jobs for US citizens (a number that would prove to be inflated). Biden has continued to greenlight multibillion-dollar weapons sales to Saudi Arabia. In October 2022, NPR’s Jackie Northam speculated why: “Well, some Democrats in Congress want the US to freeze weapons sales to Saudi Arabia. But, you know, those represent a lot of American jobs.”
William LaPlante, Biden’s appointee to top weapons-buyer for the Pentagon, has embraced the “jobs” justification to call for massive investments in the military industry. In an October 2022 article from the Department of Defense, he is quoted touting the importance of massive investments in cutting-edge military industry research and manufacturing, in part because it is important for the US workforce. “We must work to support American workers, by scaling up talent pipelines that will support the advanced manufacturing careers of the future,” he said.
Throughout his career, LaPlante has moved from government to industry, then back to government. And, in turn, LaPlante’s “jobs” justifications echo the industry’s. Weapons trade groups like the National Defense Industrial Association aggressively tout the importance of tremendous public investments in the “defense industrial base” for job creation in the United States. And individual weapons companies do the same, among them Lockheed Martin, which champions the astronomically expensive and malfunctioning F-35 fighter jet as “delivering tens of thousands of high paying, high quality jobs to American workers across the country, and around the world.”
“Job creation” is used to justify the mass transfer of public funds to a private military industry that produces the F-35 and other weapons. Stephen Semler of the research organization Security Policy Reform Institute estimates that the 2023 National Defense Authorization Act will put $452 billion in military contractors’ pockets. This legislation was overwhelmingly passed and praised by lawmakers for the military industry jobs it would supposedly create.
Such claims of job creation should not, of course, be taken at face value. Heidi Garrett-Peltier wrote in a 2017 paper for Brown University’s Costs of War project that
education and healthcare create more than twice as many jobs as defense for the same level of spending, while clean energy and infrastructure create over 40 percent more jobs. In fact, over the past 16 years, by spending money on war rather than in these other areas of the domestic economy, the US lost the opportunity to create between one million and three million additional jobs.
Imagine the good that jobs in education, health care, clean energy, or infrastructure could do in the United States and across the world. Instead, we get jobs like the ones at companies like military contractor Lockheed Martin, which made the bomb that killed forty children when it was dropped on a school bus in Yemen in August 2018. Raytheon made the bomb that was dropped on a northwestern Yemen detention center in early 2022, killing at least eighty people and wounding more than two hundred. (Raytheon’s CEO has urged the Fed to orchestrate a “slowdown in the economy” and thereby boost unemployment, even as the company has historically used its supposed status as a job creator to boost business.) Why would we choose to protect and expand the jobs at manufacturers of these weapons rather than jobs that protect and expand the public good?
The same could be asked about fossil fuels. The oil and gas industry routinely inflates claims about how many jobs are created by extraction. But that doesn’t stop politicians and pundits from echoing industry talking points, and using those to defeat climate policy, even amid unspeakably dire warnings about the consequences. West Virginia senator Joe Manchin has used claims about protecting jobs to play a pivotal role in blocking climate protections, for example, even as he has had a direct financial interest in the flourishing of the fossil fuels industry — and as he has called on the Fed to increase interest rates and hike up unemployment. Summers, too, has advocated environmentally destructive policies in the name of “jobs,” arguing in 2014 in favor of US oil exports because, in part, they “will generate substantial employment opportunities.”
Likewise, on the local, state, and federal level, claims about creating and protecting jobs are a key mechanism used to maintain and expand prisons and jails, in a country where nearly two million people are locked up. Activists seeking to reverse this trend face a chorus of voices warning about job losses, and this chorus plays an instrumental role in keeping the US prison population the largest in the world. In just one example, Republican representative Hal Rogers of Kentucky has thrown his support behind a proposal to build a new federal prison in Letcher County, Kentucky, which his office says “would boost the economy and create jobs.”
Job creation claims are made about other sectors, too, for example, wind and solar projects. But prisons, fossil fuels, and weapons manufacturing stand out because, in these areas, claims about job creation are paramount to their maintenance. Job creation is used to override the most rational concerns and stark warnings about harmful and reactionary systems.
Of course, jobs do matter — no one should dismiss concerns about good, union, dignified work. We need to create new jobs, and fast. We can’t transition away from war, fossil fuels, and incarceration by leaving workers behind. And indeed, rising prices are a real problem, but there are better ways to respond than throwing people into unemployment: for example, raising the wage floor, putting constraints on corporate cost hikes, and improving social supports.
But we are already seeing that the present political response to “inflation” is premised in treating working people like they are disposable, throwing them out of their jobs without basic compassion or social programs to fall back on. When held up against the endless drumbeat of “job creation” used to justify systems of violence and destruction, it becomes clear that the political class’s professed concerns about jobs are disingenuous: this is rhetoric is used to advance the interests of capital and the security state.
That pundits and officials are so openly contradicting one of the greatest ideological underpinnings of our political system should give us all whiplash — and push us to question the ideological “truths” that guide US policy. “Job creation” is a catchall when justifying the most damaging institutions in our society, a capital-friendly pseudo-populist truism beloved by politicians because it sounds good and offends no one. Instead of demanding basic living standards, higher incomes, union growth, or true working-class power, politicians who insist on “job creation” can appear to care for the worker while propping up the Chamber of Commerce.
Recent calls from our elites to increase unemployment to drive down wages and reduce worker power expose the vacuity of this framework. “Jobs” are an unassailable good when politicians are trying to sell a prison, or casino, or oil extraction, but unimportant — if not harmful — when labor power gets a bit too powerful.