Interesting Businessweek article entitled What’s wrong with the U.S. Job market?. It’s what we should debating.
The answer is clearly not the one we are hearing increasingly: that kids are getting too much education. That if only college aged students got technical rather than liberal arts degrees far more folks would be working. What nonsense!
As the article makes clear, the high unemployment rate understates the job creation challenge. Most worrisome is that the employment-to-population ratio is down to 58.6% even lower than during the 2007-09 Great Recession. In December 2007 –– the month the Great Recession started –– it was 62.7%. It’s unprecedented that the labor market has kept falling in an expansion.
Peter Coy, the article’s author, explores both supply and demand explanations for the absence of jobs. Supply being that people have the wrong skills for today’s jobs. This is that we have too little education attainment, not too much. On the demand side that employers don’t need to add workers due to a combination of globalization, technology and too little consumer demand for goods and services made worse by fiscal policy at the state and federal level to cut government spending to balance budgets rather than stimulate job creation.
Coy concludes: Five years since the start of the unemployment crisis, the problem with the U.S. labor market isn’t weak supply or weak demand. It’s both. At the same time, plenty of good and innovative ideas for how to put more Americans back to work are out there. Fixing aging infrastructure is a job generator that’s a no-brainer at today’s low interest rates. Youth jobs programs need more funding, not less. Jeff Madrick, a senior fellow at the Roosevelt Institute, calls for a revival of “Fordism”—Henry Ford’s sensible idea of paying workers enough to afford what’s for sale. All that’s needed is the will to act.
Exactly. Why we are not debating job creation strategies is unfathomable. Governor Blanchard responded to an unemployment rate of more than 15% the year before he was elected with a big transportation bond program and the Michigan Youth Corps that put thousands of young people to work. They worked! Why is it that no one –– in either party –– has even proposed an aggressive job creation agenda like Jim Blanchard? Its time we put putting people to work at the top of the nation’s and state’s agenda.