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Lane: 19 ways to view 4 percent

BY JOE LANE | JULY 20, 2015 5:00 AM

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Earlier in the campaign season, Republican hopeful Jeb Bush made the assertion that he believes 4 percent year-after-year real GDP growth is possible for the entire country.

Bush elaborated on this belief with comments he made last week. As Bush put it, according to the New York Times, “people need to work longer hours and through their productivity gain more income for their families.”

The comment quickly attracted criticism. Most notably, Democratic hopeful Hilary Clinton got involved in the conversation by tweeting, “Anyone who believes American workers aren’t working hard enough hasn’t met enough American workers.” To which Bush quickly responded via Twitter, “Anyone who discounts 6.5 million people stuck in part-time work & seeking full-time jobs hasn’t listened to working Americans.”

Since the original interaction between the two politicians, news outlets have been abuzz discussing the validity and sincerity of Bush’s statements, stating he was simply referring to the 6.6 million Americans seeking full-time employment but stuck in part-time positions.

Few,  if any,  Americans — regardless of political allegiances — would argue against Bush’s desire for part-time workers seeking full-time employment to achieve it. Many economists agree that in order to achieve 4 percent growth, Bush’s comments would have to extend past this portion of the working population.

As the Times points out, there would have to be an interesting shift for this increased number of labor hours to work (so to speak). According to a source from the article, the taxing of labor income distorts work-leisure preferences.

Workers know they are going to have a portion of their income from labor taken away in the form of taxes. This means, that in order to force American workers to be interested in working longer hours, taxes would have to be created on leisure activities or through a decrease on income tax.

If American workers are allowed to keep a greater percentage of their paycheck, they will be more inclined to work longer hours. The Times points out that the U.S. already has a relatively long work week when compared with other high-income countries, but it could handle an increase.

The idea of increasing the working hours of Americans that are already working fairly long weeks is certainly tough to handle. Conversely, the benefits of a longer workweek in the grand scheme of things are hard to deny — with respect to overall economic health of the country.

Yet there are other factors to consider. As the workweek lengthens, individuals will spend less time with loved ones, relax less, and lose time to spend money that would be injected into the economy through leisure activities.

According to the GOP website, there are 19 individuals in consideration for the Republican nomination. With an enormous number like that, Republican hopefuls must find any point of differentiation to stick out. The economy has been a common jumping-off point for Republicans.

Republicans have taken to standing by two things more fervently than ever — the economy and immigration reform. Oddly, increased immigration is one of the few things that can achieve such economic growth. The other is increased productivity, which comes from increased labor hours.

Come election season, Americans will have the difficult choice between Republicans adding labor hours to their week and Democrats accepting the average GDP growth of the past. Either way, this election season will be split in more ways than one.


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