The US Jobs Challenge and Its Future

by |October 27, 2012
JOBS

US jobs sign, Washington. Photograph: Karen Bleier/AFP/Getty Images

 

Collaboration between government and the private sector will be essential to substantially increasing job opportunities. The U.S. unemployment rate fell to 7.8% in September 2012 – its lowest level since January 2009.  Despite the dip in the rate, which does provide a glimmer of hope, this number is still relatively high. The rate itself does not tell the whole story. For example, only 114,000 jobs were added to payrolls in September. In fact, these figures seem hard to comprehend -a decline in the jobless numbers even though job growth was not especially strong. The data is partly attributed to a surge in the number of Americans taking part-time jobs amidst the scarcity of full-time ones.

The net gain in U.S. jobs in the last decade between 1999 and 2009 has been nil. Even in the worst of U.S. recessions between the 1940’s through the 1990’s, employment increased. The real estate bubble and substantial foreclosures and lingering student debt for young people who cannot find employment compound a longstanding economic downturn.  As political parties and pundits continue to diagnose how this situation arose, there is no single answer. In addition to the role of U.S. policies and decisions by U.S. businesses, many macro global factors have changed the nature of employment not only in US but worldwide.

World_Bank_Jobs

World Bank 2013 Jobs Report – Floating Market – Indonesia – Photo by Andi Sucirta

The current financial and job situation has been attributed to numerous factors. These include insufficient government regulations and policies, globalization and trade imbalances, mercantilist currency policies, risk taking and a culture of irresponsibility among financial institutions, and more.  According to World Bank’s 2013 World Development Report on Jobs, 50 million jobs worldwide are still missing compared to the situation before the global economic crisis. 600 million new jobs are needed over next 15 years to keep current global employment rates.

The report maintains, “Development happens through jobs. A vast majority of jobs are created by the private sector. Governments, though, can support— or hinder—the private sector in creating jobs. The idea that development happens through jobs sheds new light on the strategies, policies, and programs governments can pursue.” How jobs contribute to living standards, productivity, and social cohesion vary depending on the nation.

All nations need a job strategy to develop and grow. This reality not only applies to countries struggling to better their economic situation. Remarkably successful East Asian economies such as Korea and Singapore that have delivered inclusive growth over many decades have benefited from job strategies at specific points.  Employment strategies require sustained long term coordinated action between the public and private sectors and with civil society and nongovernmental organizations.

The Republic of Korea and Singapore are success stories combining long-term economic growth with rapid poverty reduction and strong social cohesion. In October 2010, the Korean government launched the “National Employment Strategy 2020 for the Balance of Growth, Employment and Welfare.” The strategy was rooted in the mismatch between macroeconomic indicators that pointed to a recovering economy and the inability of individuals—especially youth—to find adequate employment.

"Korea_Factory_Workers"

Korean Factory Workers

Programs have been initiated under this strategy, which have encouraged young people to start businesses and facilitated the employment of high school graduates through close partnerships among schools, businesses and job centers. The strategy considers four factors for job growth. One of these factors, collaboration between the public and private sectors for employment creation, has contributed to prosperity in the current global financial crisis and enhances prospects for future job growth.

Indeed, the U.S. is an entirely different context, but what lessons can the U.S. learn from employment strategies across the globe? While numerous factors shape national employment contexts, cross sector collaboration is one element that is critical to job creation in any environment.  Discussion of unemployment and job creation is heating up this year’s U.S. presidential race. While President Obama and Governor Romney disagree on numerous matters, they seem to agree on the significance of public-private partnerships toward job growth.

The Obama Administration recently announced $20 million for 10 public-private partnerships to support American manufacturing and encourage investment in the US.  The 10 partnerships were selected through the Advanced Manufacturing Jobs and Innovation Accelerator Challenge, which is a competitive multi-agency grant process announced in May 2012 to support initiatives that strengthen advanced manufacturing at the local level. These cross sector partnerships consist of small and large businesses, colleges, nonprofits and other local stakeholders that “cluster” in a particular area.

The funds will help the winning clusters support local efforts to spur job creation through a variety of projects, including initiatives that connect innovative small suppliers with large companies, link research with the startups that can commercialize new ideas, and train workers with skills that firms need to capitalize on business opportunities. The 10 winning initiatives — based in Arizona, California, Michigan, New York, Oklahoma, Oregon, Pennsylvania, Tennessee and Washington — will each receive approximately $2 million to fund projects that are expected to train a total of 1,000 workers and help nearly 650 companies leverage a cluster’s resources in their regions and create jobs across the country.

Governor Romney who projects himself as champion of the private sector recently spoke at the Clinton Global Initiative 2012,and strongly endorsed 10 years of progress on public-private partnership in economic development.  In his remarks, Romney said his economic message of championing free enterprise could be combined with federal foreign aid to better position unstable developing countries for long-term economic growth.

Presedential_Debate

US Presidential Debate 2012

Whichever candidate wins the election, the U.S. government’s Executive and Legislative branches will have to substantially address the job creation challenge. The magnitude of this challenge is great. It will require cross sector cooperation, and a keen understanding of the global context.  Additionally, the challenge is long term.  It will also require deep engagement with schools to prepare the next generation with the competencies necessary to survive and thrive in this century. Indeed, some of the jobs lost in the U.S. and world are not coming back.  Higher education, innovation, and knowledge development will be integral to informing the industries (existing and new) that will create the jobs of the future.

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