Robby Moore is the Elbridge Amos Stuart Professor of Economics at Occidental College. He has been teaching at Occidental since 1978, prior to which he was a Assistant Professor of Economics at Harvard University. Professor Moore has published four textbooks and has written in numerous journals including Quarterly Journal of Economics and the American Economic Review.
Today we sat down with Professor Moore to discuss the job market and the impact of the HIRE Act, the American Recovery and Reinvestment Act and the passage of Health Insurance Reform.
Q: Do you believe that the the stimulus bill was effective in saving jobs in the American economy?
RM: No, the bill was not focused enough to have any real impact. The stimulus should have been focused solely on job creation. I think it has had some minimal effect, but I think it was horribly designed. Any stimulus should be very targeted, very short term, and focused towards sectors that are hemorrhaging jobs. The better approach would have been a smaller stimulus that would have utilized tax cuts more effectively. Fixing the financial freeze on Wall Street was more important to the job market then the measures adopted by the stimulus.
Q: The CBO noted that the stimulus package has saved roughly two million jobs in the fourth quarter of 2009, what are your thoughts on this?
RM: Most economists look at net jobs created rather then this mythical figure of jobs saved. Jobs saved does not account for jobs lost in other sectors.
Q: What impact do you think the passage of comprehensive Health Care reform will have on the labor market?
RM: The passage of Health Care will most likely increase unemployment. This is a bill of trade-offs. While it increases accessibility, which could considered a good thing, it will create uncertainty for small businesses. Obama has tried to radically change the economy which will have and adverse effect on small businesses.
Q: Where do you think the job market is headed in the next 5-10 years?
RM: Well, for economists that a long time. Because of all of this uncertainty I don't see the unemployment rate lowering that much for a while. Most economists are saying it will take quite a long time. The main determiner of that is if we become a regulated economy. The way Obama is going we are looking more like Europe. Unemployment in France, Germany, and England over the past ten years has been much worse compared to here in the United States - and we are moving in that direction.
Q: Do you think the administration should be focusing solely on job creation? If so, what measures would you recommend?
RM: I believe in less regulation of the labor market. I also believe in eliminating the minimum wage for young workers. There are currently high rates of teen unemployment mostly due to the minimum wage. There is no easy fix, long term growth needs to be fostered in order to increase employment - its a tough to accomplish. If you can target the spending, like on infrastructure, that might be somewhat effective. Defensive spending might also be effective in creating new jobs, but this is unlikely to happen.
Q: Do you see the potential for job creation in the green energy sector?
RM: If it is in a sector that is not already filled to capacity, so one in which there is more room for growth, then its okay. However, it is still such a small share of the economy. Maybe 30 years from now it will be a big enough share to have a real impact. Right now the green energy sector represents less then 1% of our GDP.
Q: Any final thoughts?
RM: The government needs stop creating uncertainty within the job market. Tax cuts, as seen under Reagen and Bush would be helpful for small business growth. We must foster long term growth through less government regulations and restrictions.
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