Saturday, October 17, 2009
Economists are worried that the jobs we’ve lost in this recession are not going to be coming back when the economy recovers. Unfortunately, the economy is not going to recover until the people who have lost their jobs find new ones, and that’s the rub. How are we going to get all these people back to work if the jobs they had are gone for good?
Traditional monetary and fiscal policy aren’t going to help here, nor will our government’s fixation on the stock market and solving large company problems. The problem of jobs that aren’t coming back is structural. The economy is changing, and has been for years, in ways and at a pace which dictate a new topography of business and employment in the United States. It’s going to happen, one way or another. These are changes which are inevitable, ongoing and essential to our prosperity. Maybe there is more our federal government can do to facilitate and encourage the process, to leverage this metamorphosis, between what the economy was and what it will be, for our collective advantage.
The government’s answer to disappearing jobs seems to be training. Go back to school, academic or vocational, and learn how to do the jobs that the future of our economy will be creating. The problem is, no one knows for sure what positions and how many of them there will be, or when and where they’ll be available. Odds are, the majority of people investing in further training and education are not going to be reaping the benefits of their re-invention anytime soon, if ever.
Understandably, even if we could predict the future with precision, there’s no one coordinating any of this education and training to make sure there aren’t more people pursuing a given job type than even a robust economy is willing to hire, and not enough preparing for other positions. It’s not a new problem. High school students grow up in an economy in which there is a shortage of a given profession, only to find that shortage having been resolved four years later when they graduate from college. Through no fault of their own, they’ve prepared themselves for a career in a market in which the supply of qualified candidates for entry level positions now exceeds the demand – while other, newer career paths for which the graduate is not prepared are paying a premium, begging for qualified applicants. Now what?
The solution is easier said than done. (Aren’t they all?) I’d like to suggest a much faster and far more certain strategy for re-employing the unemployed, and for minimizing the likelihood and impact of future recessions. I want our government to offer a series of incentives and support services which facilitate a fluid, continually shifting national topography of business and labor. Quite literally, in the short-term I want to move the unemployed to where the jobs are for their current skills and experience, while encouraging the longer-term expansion and development of new businesses in communities which have the requisite infrastructure and qualified labor, need new employers, and are worth saving.
The US economy isn’t so much a national entity as it is an agglomeration of many, many overlapping and interlinked local economies of varying size and character. Even in the worst downturns as measured by national statistics, there will be communities, large and small, which are less affected and may even be experiencing economic growth because of their particular mix of industry and other factors. The question is, how can we help unemployed people from one community – people who had the jobs that we believe aren’t coming back – take jobs for which they are already qualified, without the need for extensive retraining, but which are in other communities too far away for them to commute? …jobs that may be hundreds, even thousands of miles away in different parts of the country?
People – even the most motivated, financially viable unemployed people – tend to stay put. They’re used to where they’ve lived, in some cases, for their entire lives, where they have family and friends, where their kids go to school. Knowledge of employment opportunities in distant markets may not be readily available, particularly to the employed in the lower paying, less financially viable strata of the workforce where unemployment and the other ramifications of a recession are most severe. And even if they knew there were jobs in other markets, how could they be sure they would be hired if they moved there, and how could they afford to relocate?
The good news is, our government can help, and for far less than the ridiculous $533,000 per new job we’ve spent so far. Here’s what we need to do…
1. Ask the employers who are hiring to participate in a government program which will enable them to consider candidates at a distance who are also willing to participate. Participation is voluntary, but employers will cooperate because drawing from a broader geographic area will give them a greater pool of prospective employees from which to choose, enabling them to find better people willing to come to work for them, quite possibly at lower cost than they would have paid in a more competitive local market.
2. Identify the specific jobs, wherever they are, and publicize that information via the Internet. I’m talking about a national job bank of biblical proportions.
3. Match job requirements to worker skills and experience and notify the unemployed. Participation should be voluntary in general, but required as a condition to receiving unemployment compensation.
4. Cover the cost of pre-qualified prospective employees coming in for interviews, and on-the-job training. (No institutional re-training is as good as on-the-job training by your new employer.)
5. Get the new employer to guaranty a full year’s employment for the new hire – which the employer will do in return for our subsidizing the cost of the new hire, either directly or through tax incentives.
6. Give the family a financial incentive to move which the employee can use either to relocate his entire family and/or to live in the locale of his (or her) new job until he’s sure in makes sense for his family to join him.
In effect, I want our government to encourage the immigration of the unemployed from one US market to another, on a scale previous federal, state and local employment programs have never approached. How would we fund all this? In part, perhaps in large part, from the money we save from no longer having to support these unemployed families, from savings we will enjoy at all levels of government from the discontinuation of lesser employment programs this new, national effort will render unnecessary, from the tax revenues we’ll receive directly from new jobs salaries and wages, and from the multiplier effects of spending by these newly employed consumers.
Would people be willing to relocate for just a year’s commitment of on-the-job training and new employment? Well, what would you do if you were unemployed, had been for months, with no real prospect of being rehired in your current market?
Moving the unemployed to where the jobs are now is one thing. Getting existing and new companies to open facilities in communities with under-utilized infrastructure and workforce is quite another.
Take Detroit, for example, long known for its depressed economy and devastatingly high unemployment largely due to changes in the automotive industry which is going to recover, in one form or another, but not in Detroit. Either we, through our federal government, bring new employment to that city, or we allow it to continue to decline, its problems festering at our expense.
If the current recession has taught us nothing else, it’s not that Wall Street can be reckless and irresponsible in its pursuit of wealth. We’ve always known that, and early evidence is that the Obama Administration’s bailout has done little or nothing to alter this reality. What we should have learned is that the recession is the consequence of long coming structural changes occurring within our economy, that the topography of our economy is changing in ways which may have nothing to do with the historic reasons for the development of this or that city, and that what happens to Detroit and to its counterparts elsewhere in the country is not just a problem for that city, or even Michigan, but for entire country.
We, all of us, support the unemployed and the economically devastated communities in this country. They are a drain on our national resources. They contribute in no small way to our budget deficit. Most importantly, we are deprived, every one of us, of the contribution these out of work Americans would make to our collective success were they gainfully and continually employed.
It’s high time, and long overdue, that programs to facilitate changes in the topography of employment and business development be given equal standing with traditional monetary and fiscal economic policies which are proving themselves to be less and less effective.