EDITORIAL: How to turn 8,300 jobs into 83,000 to promote Biden’s American Families Plan

Here’s one example of why you should be skeptical of projections promising staggering job growth from President Joe Biden’s spending plans.

Mr. Biden’s American Families Plan would cost $1.8 trillion over 10 years. If passed, much of that funding would go toward subsidizing child care by limiting how much it costs low- and middle-income families. It’s reasonable to assume this would increase demand for child care, leading to more child care jobs. But how many?

The plan allocates $425 billion for child care, according to Lenore Palladino, an assistant professor of economics and public policy at UMass Amherst. She estimated Nevada would receive just under $4 billion, based on funding the state received in the American Rescue Plan.

That’s a lot of money. Ms. Palladino calculated that it would produce 83,674 jobs in Nevada over 10 years. That’s a jaw-dropping number. For comparison, the Clark County School District employs about 18,000 licensed teachers.

But dig deeper, and more nuances emerge.

The 83,000-plus jobs number “is annual jobs, meaning that if one worker is hired in 2021 and works until 2031, they are counted as 10 of the jobs out of the 83,000, even though they are one individual,” Ms. Palladino wrote.

Oh. Most people who work in a single workplace for a decade think they’ve had one job, not 10 jobs.

There’s more. The jobs number represents those employed directly and “the number of jobs that those workers were indirectly creat(ing) through their increased spending on goods and services throughout the economy,” Ms. Palladino wrote in an email.

In economics, this is often called the multiplier effect. Government doesn’t just take credit for those it directly employs. It also tacks on the jobs that may be created by the spending of those employees in the broader economy.

There is some truth to that calculation, although many market economists might argue that more jobs will result if the money is left in the private sector to begin with. After all, politicians spend money that they’ve expropriated from the private economy through direct taxation or created via fiat by inflating the currency. The bill might be pushed onto the next generation through the country’s ever-expanding debt. When the government takes excessive amounts of money out of the broader economy, it decreases economic growth. That leads to fewer private-sector jobs.

In simpler terms, there’s no free lunch. So let’s just say that the idea Mr. Biden’s proposed spending blowout on child care will create 83,000 jobs is Nevada is grounded more in marketing than reality.