Jeb Bush on GDP growth

From ABC News:

During an interview that was live-streamed on the app Periscope, Bush told New Hampshire’s The Union Leader that to grow the economy, “people should work longer hours.”

He was answering a question about his plans for tax reform and responded:

“My aspiration for the country and I believe we can achieve it, is 4 percent growth as far as the eye can see. Which means we have to be a lot more productive, workforce participation has to rise from its all-time modern lows. It means that people need to work longer hours” and, through their productivity, gain more income for their families. That’s the only way we’re going to get out of this rut that we’re in.”

Already the Democratic National Committee has pounced, releasing a statement that calls his remarks “easily one of the most out-of-touch comments we’ve heard so far this cycle,” adding that Bush would not fight for the middle class as president.

I don’t think he means this in a malicious way.  He obviously could, but he is making an economic argument here, not a personal responsibility statement.  Either way, the DNC is correct, it shows a remarkable lack of understanding about the options Americans have in their work.

Keep in mind that Mr. Bush has never had to do a conventional job search, or hold a regular job.  He has always been privileged.  I’m not saying he hasn’t worked, and worked hard, and maybe competently.  But he has never started from a place of disadvantage, or even anonymity.

There are really two main problems with his statement, from a leadership perspective.  First, it assumes that individuals are choosing their work hours.  This is true, to a point, but Obamacare has limited many part time employees to a maximum of 30 hours per week, and they do not choose this (his campaign later pointed this out, in their response to DNC statement).  Americans who are out of the workforce, which he specifically mentions, may not be suitable for the work that is available.  He does not address how he thinks that mismatch should be fixed, and whether or not government has or should have a role.

Secondly, it’s not really economically correct.  Americans really do not need to work longer hours to generate GDP growth.  He has the right factors – labor productivity, hours worked, workforce participation rate.  But when you put all 3 of those together, the answer is not necessarily “Americans need to work longer hours.”  That would be one way.  Another would be a subject that has landed him in controversy with the conservative base – immigration.  If you bring in people who want to work, then you can potentially increase all 3 of the factors.  In addition, labor productivity includes the effects of capital, that is, using machines to work more efficiently.   As in, work smarter, not harder.  So there are a lot of ways to get to that 4% number he wants to see.  Additionally, real GDP, which is what I assume he is talking about, includes inflation.  So if the Fed can generate 2% inflation, then he’s halfway there already.



Leave a comment

Filed under Politics

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s