Getting Americans Back to Work
From: Bloomberg
For all my can-do optimism, upbeat outlook, and global scope, I feel dragged down by the U.S. jobs challenge. High unemployment coincides with eroding competitiveness and lack of consensus about how to help people in tough times.
Last week, Senator Jim Bunning (R-Kentucky) refused to let the Senate consider a bill — already passed by the House — to extend unemployment benefits, meaning that thousands of people will lose financial support. Policy-makers nationally and in the states know that small businesses are key to job creation, yet new constraints make lenders cautious about giving them loans. Meanwhile, China’s sovereign wealth fund has shifted investment from the U.S. to emerging markets, one sign that America is a less attractive place for investment. Moreover, China has a reputed labor shortage in its industrial heartland while the U.S. has a labor surplus.
The American labor surplus includes well-educated middle class professionals and managers who have watched their jobs disappear. Many of them are no longer counted in national unemployment statistics because they have given up.
For example, a talented engineer enjoyed success and promotions as a technology marketing manager until a company-wide layoff in the fall of 2008. His severance pay lasted six months. He looked for jobs without success; he was interesting enough to warrant interviews, but no one was hiring. He then tried to create a consulting firm to provide temporary executives for young ventures; when that fell apart, he took a modest part-time consulting assignment on his own. Now the family relies on his wife’s income and health insurance. She feels trapped in a demanding and unsatisfying job that she can’t leave because of the health benefits. She has deferred her dream of starting a business producing educational games. However, she is luckier than her neighbor, an economic development specialist responsible for job creation strategies who, ironically, lost her job in state layoffs.
What do I tell these jobless professionals who are holding their lives together with duct tape? I can say: Hang in there. Don’t give up hope. Develop a big idea to use later. Start your venture. Volunteer at a community organization. Find partners. Think internationally. Befriend immigrants with ties to an emerging market. Restore your sense of purpose. Remember what truly matters.
All this good personal advice is not enough. While each of us can try hard to improve our circumstances, it is difficult when new sources of jobs are not developed faster.
In policy circles, including in my service on the Governor’s Council of Economic Advisors in Massachusetts, I have stressed job creation for more than a year. Finally, steps are underway — such as a proposed state loan fund for mid-sized growth companies. New federal tax credits will encourage small and mid-sized businesses to hire. But promising businesses must see prospects for success. Through their supply and distribution chains, big companies can identify small companies with expansion potential and help them by, for example, opening doors to export markets or improving their ability to compete for contracts.
I feel ever-greater urgency to tell everyone who can create a new job to do it quickly. A professional I know was asked for a loan by a client, a builder behind in his payments. My friend instead hired him to complete repairs he had been deferring. Another job-creation strategy is mentoring. The unemployed engineer mentioned earlier is helping several startups to launch new products more effectively as a volunteer or for equity. If the startups succeed, he might mentor himself into a job.
Imaginative small actions could aggregate to bigger impact. Underutilized office space can become an incubator for others starting a business. Shared work and living spaces are becoming more common for recent graduates working on new ventures; communities should encourage and facilitate this. Those with international business ties can encourage business partners to invest in the U.S.; good people and cost-reducing incentives are available now.
Signs point to a slow recovery, which means that improvement in the job picture will not happen without determined effort. Before any other national problems can be solved or confidence restored in the global economy, Americans need to get back to work.
