Jan 1 2012

Jobs Are at Stake When Profits Are at Stake

Lobbyists help media pay attention to employment

Tar Sands--Photo Credit: Jiri Rezac/Greenpeace

Tar Sands–Photo Credit: Jiri Rezac/Greenpeace

When debate heated up in November over the Keystone XL pipeline—a 1,700-mile-long structure that would carry oil from Canada’s tar sands deposits to refineries on the U.S. Gulf Coast—reporters soon found themselves chasing the answer to a question: How many jobs would be lost if the pipeline didn’t happen?

Wall Street Journal senior editor Mary Anastasia O’Grady suggested on Fox News (10/28/11) that the pipeline would create “118,000 indirect jobs” from “feeding and housing all of these people who are going to work on the pipeline,” a number that her Journal editorial board colleague Collin Levy repeated in a Web item (11/7/11) accusing the Obama administration of “dithering” on the pipeline decision. Fox Business host Eric Bolling (11/2/11) topped that, asserting that the pipeline “could provide up to a million new high-paying jobs if it just gets signed off by Obama. Yet here we are, protesters locking arms around the White House, saying don’t do it.”

A flurry of debates followed over the fluctuating job numbers: The Washington Post (11/6/11) revealed that not only were the claims of hundreds of thousands of jobs overblown—TransCanada itself, the company seeking to build the pipeline, said in 2010 that the total number of U.S. jobs was only 20,000—but all estimates were actually in “person-years,” meaning that each year of employment would count as a new “job.” Meanwhile, a Cornell University study determined in September that the likeliest job impact would be “no more than 2,500-4,650 temporary direct construction jobs for two years” (Grist, 11/6/11).

But even where media coverage steered clear of inflated job numbers, it remained framed around the issue of employment. As one New York Times headline (9/28/11) put it, “A Pipeline Divides Along Old Lines: Jobs Versus the Environment.” CNN’s Randi Kaye (10/27/11) asserted that the Keystone pipeline would “bisect the nation…between economic hopes and environmental fears,” with CNNMoney.com correspondent Steve Hargreaves chiming in that “it’s an election year and it will create a lot of jobs.” NPR’s Morning Edition (11/3/11) likewise pitted labor supporters versus environmental concerns, concluding, “The environmentalists and the unions might both be right.”

This has been a common theme lately, especially in coverage of environmental concerns. Debates over the Obama administration’s proposals to tighten regulations on carbon emissions by coal-fired power plants were portrayed by Bloomberg News (11/9/11) as pitting “environmental advocates [who] say the coal rule is a watershed proposal to limit emissions of hazardous chemicals such as mercury and arsenic” against unions that “are aligning themselves with parts of the power industry in opposing the regulation, warning that it would cause job losses.”

Yet every policy decision—whether it’s about changes in regulation, government spending or tax policies—has job implications. Take, for example, public benefit programs: When the government increases spending on food stamps or unemployment insurance, it doesn’t employ people directly (aside from any additional government workers needed to process the forms).

But just as TransCanada’s claims of lost jobs without the Keystone XL pipeline depend on indirect spending—put more money into the pockets of oil workers, and they’ll shop at local stores, which will order more supplies and hire more employees in response—the same is true of public benefits. In fact, because jobless people tend to spend money right away rather than saving it, the Congressional Budget Office (11/15/11) has testified that extending unemployment benefits would be one of the most effective ways to create jobs, providing as much as $1.90 in added economic activity for each government dollar spent.

The notion of a jobs bang for social spending bucks, though, has been almost entirely absent from media coverage. In a story on debates over restrictions on food stamps, a program that 46 million Americans are now using —“a number up an astonishing 70 percent from four years ago”—the Philadelphia Inquirer (9/26/11) took care to note “some conservatives in Congress who wonder whether such spending should be corralled,” but didn’t speculate on the economic effects of doing so.

Likewise, coverage of the congressional deficit-reduction Supercommittee’s debates over cutting government programs for the poor—something that Republican members insisted on, and Democrats resisted—largely ignored the economic consequences of such a move. The message, rather, as one typical New York Times story (11/20/11) put it, was that “at its core, the fight has been over who should be shouldering the burden of deficit reduction in a time of stagnating median incomes and growing disparity.”

It’s not that arguments for unemployment insurance as stimulus are hard to find. The National Employment Law Project, for example, noted in an October 11 briefing paper that “when federal UI payments peaked in the fourth quarter of 2009, the program saved or created 1.1 million jobs on an annualized basis,” and noted in its economic recovery policy recommendations (“Filling the Good Jobs Deficit,” 10/11) that with numerous states paying their UI benefits with borrowed money, they may soon cut back, putting their local economies at risk.

Of course, NELP isn’t a big-spending lobbyist—unlike, say, the American Petroleum Institute, which sponsored a report in September that claimed that approving increased oil production would “support an additional 1.4 million jobs” by 2030. (API also ran TV, radio, and print ads touting the million-job figure, asking, “Are you one in a million?”—Hamilton Spectator, 10/14/11).

That report was quickly picked up by Republican presidential candidates, and then found its way into media reports—such as on CNN (10/14/11), where business correspondent Alison Kosik helpfully noted that “the oil industry came out last month with a report saying that Perry’s [oil drilling] plan will help a lot.”

Similarly, when a weapons industry-sponsored study claimed more than a million job losses from automatic Pentagon cuts if the Supercommittee effort failed, the Washington Post (10/25/11) ran an article reporting the claims without citing any critics of the study, let alone any comparison to the job losses that would result from other deficit reduction measures.

Interestingly, one of the first reports on the API ad campaign was in a Post article (10/10/11) headlined “Companies Use Fuzzy Math in Job Claims; Candidates Still Buy In.” An equally accurate headline could have pointed out that “Media Still Buy In” to job claims—so long as they’re put forward by those who can afford to buy their way into the debate.

Neil deMause is contributing editor for economics for City Limits magazine.