Fiscal Stimulus in a Service Economy

In an op-ed in the New York Times this morning Linda Hirschman complains that what’s been discussed as a stimulus package by the incipient Obama Administration doesn’t provide enough jobs for women:

The bulk of the stimulus program will provide jobs for men, because building projects generate jobs in construction, where women make up only 9 percent of the work force.

It turns out that green jobs are almost entirely male as well, especially in the alternative energy area. A broad study by the United States Conference of Mayors found that half the projected new jobs in any green area are in engineering, a field that is only 12 percent female, or in the heavily male professions of law and consulting; the rest are in such traditional male areas as manufacturing, agriculture and forestry. And like companies that build roads, alternative energy firms also employ construction workers and engineers.

That’s not the half of it. This isn’t the 1930’s. We aren’t a nation of farmers, ditch diggers, and factory workers any more. Ours is a service economy and fiscal stimulus in the form of building roads and bridges will only touch a relatively small portion of it. As I’ve mentioned before that’s the problem with the sorts of projects that are being talked about: you can’t achieve what we need to achieve in the timeframe in which we need to achieve it by the means that are being discussed.

It might help if presidents and their staffs were something other than career bureaucrats, academics, and politicians but, well, we don’t elect those any more.

On the other hand if the intent is to reverse the transition to a service economy I suspect that the downturn will be much longer and more painful than anybody envisions.

3 comments… add one
  • Andy Link

    It might also have to do with the impression I have that service workers do not have the lobbying influence that workers in other industries do. Few unions and the diversity of the service sector only add to that. So might the net effect be that the beltway class has long been trained to respond to the squeakier wheel?

  • If I remember Intro to Macro, the problem with fiscal stimulus that you are referring to is called the Time Lag problem.

  • I just wonder how a stimulus to the service industry would look? My guess is, other than direct tax relief or stimulus checks like those the bush administration sent out, there is not much we can do to directly stimulate the service portion of the economy. On the other hand, the projects being considered will have knock on effects that will also help create or retain service sector jobs.

    More importantly, we NEED improved and well maintained infrastructure for every sector of the economy and this has been neglected for many years. At a minimum, the money spent on these projects will provide us with that infrastructure and that will be used by the entire nation for years to come.

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