For Jobs, Cities Should Look To The Supply Side

I think it’s pretty frustrating to hear DC officials explicitly talking about the idea of making public service provision less efficient as a job-creation scheme. The city’s planning director, Harriet Tregoning, is right to say that the city is “going to need more jobs that are suited to every level of education” and not just IT and professional services, but there’s tons of low-hanging fruit in this realm. The city is full of formal rules and informal practices whose purpose is to make it difficult to open bars and restaurants of various kinds in different locations. On the national level, it’s difficult or perhaps even impossible to counteract a demand shortfall with supply-side reforms. But even in models that lead to very strong negative conclusions about supply-side actions in severe recessions, these considerations don’t apply on the municipal level.

Massachusetts, for example, is considering a proposal to end the state’s ban on “happy hour” specials. This is exactly the kind of thing state and local governments should be looking at. If Massachusetts makes it easier to tempt people into the bar with drink specials, that means more work for bartenders and bar-backs, more work for delivery guys, etc. It’s more glamorous for politicians to talk about high-end jobs, but as Tregoning says, you need employment for people with low levels of formal education too. Many commentators seem to me to be irrationally biased against working class service sector occupations relative to working class manufacturing works, but even leaving that aside, there’s just no way a big expensive city like DC or Boston is ever going to play home to giant factories.