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How Many New Jobs Are Really Needed Each Month?

Only creating 200,000 jobs a month: Be alarmed, be outraged, be scared and then do something about it.

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Your vital signs are often taken when visiting a doctor so your health condition can be evaluated. The government does something similar when evaluating the health of the economy.

Tests, surveys and studies are done weekly and monthly by the United States government to determine the health of our economy. The onslaught of reports released by our government on almost a daily basis has given birth to number numbness which in turn has most Americans unable to discern which report is relevant and needs attention and which aren’t.

Therefore, most people turn a blind eye.

Of all the reports released, none are more important than the monthly employment report.

This report clearly shows if we are on the path to sustained tax revenue into the government that is required to fund our countries ongoing "work." Today we need revenue flowing in faster and stronger since our annual spending is at elevated levels.

In this Wednesday, Oct. 23, 2013, file photo, Luis Mendez, 23, left, and Maurice Mike, 23, wait in line at a job fair held by the Miami Marlins, at Marlins Park in Miami. Employers added a scant 74,000 jobs in December after averaging 214,000 in the previous four months. The Labor Department said Friday, Jan. 10, 2014, that the unemployment rate fell from 7 percent in November to 6.7 percent, its lowest level since October 2008. But the drop occurred mostly because many Americans stopped looking for jobs. Once people without jobs stop looking for one, the government no longer counts them as unemployed. (AP Photo/Lynne Sladky, File) In this Wednesday, Oct. 23, 2013, file photo, Luis Mendez, 23, left, and Maurice Mike, 23, wait in line at a job fair held by the Miami Marlins, at Marlins Park in Miami. (AP Photo/Lynne Sladky, File)

Remember, tax revenue is the life blood for our government and if the tax revenue doesn’t flow consistently and at the correct level, our economy will have a cardiac arrest. Job creation leads to tax revenue which is one of the crucial income streams that keep our country solvent.

So people should ask "what is the desired number of net new jobs needed to be created on average each month?"

Economists are always quick to pronounce what they estimate, but rarely ever said what I needed. I sat stunned last week watching the mainstream media announce the jobs data without giving any context around the release.

I quickly concluded that most people do not know what the targeted number should be and certainly don’t have any perspective on just how bad the number was and why.

I wrote this to highlight that we cannot be satisfied with a 200,000 average gain of net new jobs. We really need about 350,000 to 400,000 net new jobs a month. The path we are on is a death spiral and only a knowledgeable populace can help change this.

Audience members hold signs appealing for jobs as they attend a Democratic news conference about extending unemployment insurance benefits which expired Dec. 28, Wednesday, Jan. 8, 2014, on Capitol Hill in Washington. (AP Photo/J. Scott Applewhite) Audience members hold signs appealing for jobs as they attend a Democratic news conference about extending unemployment insurance benefits which expired Dec. 28, Wednesday, Jan. 8, 2014, on Capitol Hill in Washington. (AP Photo/J. Scott Applewhite)

Our government is about $800 billion short each year when you subtract how much money we bring in annually in tax receipts from our expenses.

As a result of this, we have to find a way to make up for the shortfall. We can sell debt in the form of government paper and hope that other countries will buy those debt obligations.

To avoid printing money and debasing our currency, we can implement fiscal policies that can strengthen the economy that will lead to job creation. This is why tracking the jobs data is so important and why it is more than just a spectator sport and should be certainly a lot more than just a headline. The jobs data allows us to see if our nation’s income is growing or shrinking.

Most people have a hard time knowing what the correct number should be.

[sharequote align="center"]Is 200,000 of monthly new jobs good enough? The answer is solidly no.[/sharequote]

Is 200,000 of monthly new jobs good enough? The answer is solidly no.

If we want to derive the entire shortfall from federal income tax revenue, we then need to create 5.3 million full time jobs. If that is our goal then we aren’t even coming close to closing the gap. Additionally, remember that we haven’t even begun to tackle out rising debt that is at $17 plus trillion.

The longer it takes to get the jobs, the quicker the annual deficit rises. Currently, we are averaging approximately 200,000 net new jobs per month. We need to average 441,000 new net jobs a month. To put it in simple terms, we are averaging on 45 percent on our employment test.

If we created 350,000 new net full-time jobs a month averaging a $50,000 salary, at a tax rate of 30 percent, we would bring in $15,000 per new net job. This would add only $63 billion into our nations "bank account": 350,000 jobs x 12 months x $15,000 in tax revenue per job = $63 billion of new tax revenue.

This still leaves our country $737 million short to close the gap between what we spend and what we bring in (obviously, we have other sources of income from other taxes).

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It really isn’t a debatable partisan issue. The facts don't lie and it is time that Americans stop and realize the importance of increasing the number of new net jobs immediately at a much needed faster rate.

We can either get this economy growing at a rate fast enough to create full-time tax producing jobs to offset the deficit and debt or we will continue to hope and pray to borrow money from other countries and hope they keep lending it to us .

However, hope and prayer isn't what this country's economic policies should be based on nor will it be able to survive with hope and prayer.

So when you read the headline that we are only creating 200,000 jobs a month; be alarmed, be outraged , be scared and then do something about it.

It is true we have other sources of tax income, but currently about 50 percent of our nations income comes from federal income taxes.

Their countless negative consequences derived from a slow economy and dismal jobs growth. Going forward, when the jobs report is released and it is below 400,000 per month, interpret that as our country just went backwards.

For more about Ed Butowsky visit www.edbutowsky.com

TheBlaze contributor channel supports an open discourse on a range of views. The opinions expressed in this channel are solely those of each individual author.

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