Obama and the myth of job creation
Obama wants a jobs bill ASAP. Government can't create jobs. But a prepared workforce can.
San Francisco — A president’s speechwriter, desperate to relieve the rhetorical ramble of a State of the Union, will often stage a special guest in the gallery, or a line or two from a letter – anything to generate something like intimacy.
Wednesday night, President Obama described the letters that he reads “each night. The toughest to read,” he said, “are those written by children, asking … when their mom or dad will be able to go back to work.”
Does official Washington really believe that we’re waiting for government to generate jobs, somehow? What is the effect of an American president reciting everything government might do to support job creation – loans, tax cuts, high speed rail, clean energy, basic research, community colleges, student loan forgiveness – while asking nothing of the people themselves?
There’s actually very little that any administration can do to create sustainable, real employment – other than reduce the cost of credit (which the Federal Reserve has long discounted to record lows).
The “deficit of trust” Mr. Obama spoke of tonight – and sounded so determined to resolve – referred to that of a people and their government. But where real job creation is concerned, Americans should start by trusting themselves.
To do something about the state of the soup we’re in, it would be helpful if the president and commentariat would focus less on the way Washington works, and more on the way the rest of us work.
Politics corrupt our conversation about job creation. Democrats demonize trade. Republicans demonize unions. And both parties indulge in culture wars and talk in code. Whether you call a stimulus package “targeted investments” or “taxpayer dollars” depends on whether you’re getting any.
When we imagine that government – and even companies – “create” jobs, we’re missing half the story: the crucial part. The part that most of us can actually influence, right now.
It’s a paradox, but job seekers are actually job creators. People (and the politicians that love their votes) tend to focus on how many employers happen to be hiring. But an overlooked tenet of labor economics says that what’s equally vital to creating jobs is the presence of an adequately skilled workforce capable of filling them.
In other words, when the workers are ready, the jobs appear.
This is no Zen abstraction. “Ready” means retraining – going to night school, learning new skills, taking risks – not complaining, as some do, about bringing jobs back from China.
It calls for presidential leadership that doesn’t bemoan “the burden of working harder and longer for less” (a debatable factoid). It means studying harder and longer, to earn more.
It means that job seekers have to keep seeking – aware, as Woody Allen said, that 80 percent of success is just showing up. Sometimes before an employer is able or willing to pay what you’re worth.
You’ll hear much talk pegging the “true” US unemployment rate at over 17 percent, when we include what the Labor Department classes as “discouraged workers” – those “not currently looking for work specifically because they believed no jobs were available for them.”
Media make money merchandizing misery – which does a great disservice to those who need to stay motivated to look for work, the hardest job there is. To do it right, you have to keep faith in yourself, and with your family, for 12 hours a day, six days a week.
Consider a few steps to create sustainable job growth, that don’t rely on official Washington:
Redefine our idea of a “job.” The labor market already has, ever since the employment “contract” began to change forever back in the 1980s. Particularly for white collar workers – disproportionately affected in this recession – the prospect of contract work and free agency has never been easier. And by doing something of value, the résumé expands and the long grind (and potentially paralyzing shame) of joblessness is eased.
Re-tool, quickly and regularly. Small businesses looking to expand are finding more independent contractors for Web design, programming, marketing, videography, and similar work. Focus on areas of employment in healthcare and education, where there’s growth.
Reconsider unemployment benefits. Rather than make unemployment insurance an all-benefits-for-no-work proposition (which discourages any work and earnings at all), states should apply the same kind of incentive that worked with the Earned Income Tax Credit – as beneficiaries earn a little more, they receive a little less in benefits, but their net take-home is higher.
Welcome free trade. For seven decades, America’s economic and political leadership has told the rest of the world to open up trade. They did – and we and the global economy prospered. The irony of our closing down trade now makes no sense. It’s our responsibility to mitigate the negative consequences of global trade for the vulnerable (that’s something government can be good at). But to drive living standards up, we need more and freer trade, not less.
Recognize immigration for the competitive advantage it is. Our great secret, relative to Europe and much of Asia, has always been our ability to assimilate and engage the most ambitious people from around the world. This applies as much to the PhD student here from Asia or India as it does to the guy with the leaf-blower. We need to find better ways to enlist them here, not erect paper walls of visa requirements.
Innovation is no abstraction. In fact, all innovation is local – it applies to the payables clerk who comes up with a more readable spreadsheet, or the line manufacturing employee who tweaks and improves a machining process. There’s nothing exotic about “knowledge work” – we all work with our brains. Some of us use them to run our mouths. Others, our hands – on paint brushes, keyboards, school chalk, machine tools – but we all use our brains. And we can all use them better, starting tomorrow.
While tax cuts and government spending may help at the margin – for a while – “the key to a recovery is optimism,” says the godfather of all pavement-pounders, Richard Bolles (author of “What Color is Your Parachute”), who tells us that too many quit looking for work after two months – and most rely on luck.
The end of a job search doesn’t happen by luck. It’s driven by an optimism that hears past the hysteria.
The economy won’t regain momentum until Americans become more confident about spending. They won’t spend until they’re more confident in their job prospects. Until, in fact, Americans themselves start creating jobs, rather than waiting for their government to do it for them.
Mark Lange, a former presidential and Labor Department speechwriter, wrote the 1991 State of the Union address.