One of the pillars of the Dog’s philosophy is that there are no simple solutions to complex problems. It is true if you focus on one aspect of a problem, then it can often appear that there is a ten word or less solution to it. The reality is that while you might alleviate this narrowly defined problem, you are really just pushing it down stream in the process. Nowhere is this clearer than in the need to create jobs.
Right now the nation has a enormous jobs deficit. If we define full employment as 4% and the take the U3 rate (unemployed workers plus the so-called discouraged workers) gives us a unemployment rate of 16.5 % or 25 million people looking for work. This means we need roughly 18 million jobs to get to full employment or back to where we were in mid-2007. There is also the need to create between 150,000 and 170,000 jobs a month to keep up with our population growth, as younger workers enter the workforce.
Robert Pollin has a good article in the Nation this month laying out how this number of jobs could be created in the next three years. While that sounds very steep the article points out that it has been done before:
Even with a successful coordination of large-scale expansions of private and public spending, is it realistic to expect that the economy, which has been so trampled down for the past three years, could possibly create 18 million jobs over the next three years? It is an ambitious but realistic goal. This is basically the rate at which employment grew under Gerald Ford and Jimmy Carter coming out of the 1974-75 recession. The Carter years are widely derided through the lens of his 1979 "malaise" speech. Yet the first three years under Carter generated the fastest expansion of job opportunities of any comparable period since, including any three-year stretch under Reagan or Clinton.
Mr. Pollin’s idea is two fold, he wants to create a structure where the banks use the nearly 800 billion they are keeping on their books as a cushion to invest in green businesses. This would require some new supports and programs from the Federal government to make the investment attractive and relatively safe. One of the programs is a Federal work share program that would provide support for workers who are not working full time,. This measure would keep the economy from further deterioration while job creating programs came on line.
These are pretty good ideas, but there is more that needs to be done. The problem with jobs in this economy is more than just supply and demand. In the decade between 1999 and 2009 the net number of jobs created was 0. That’s right, there were no net new jobs created in the United States. The conventional wisdom is that this is mainly due to outsourcing of jobs to other countries, however it is starting to look as though it is actually due to the consolidation of businesses.
Barry C. Lynn and Phillip Longman have a article in this months Washington Monthly which makes a strong case that consolidation has broken the job creation machine of the U.S. economy. It is widely accepted that small business is the engine of job creation. However if there is no room for small businesses to start up and compete with innovation, then there are no jobs created.
Then there is the problem of what happens when companies consolidate. From their article:
The way corporate consolidation destroys jobs is clear enough, too—it dominates the headlines whenever a big merger is announced. Consider two recent deals in the drug industry. The first came in January 2009 when Pfizer, the world’s largest drug company, announced plans for a $68 billion takeover of Wyeth. The second came in March 2009, when executives at number two Merck said they planned to spend $41.1 billion to buy Schering-Plough. Managers all but bragged of the number of workers who would be rendered "redundant" by the deal—the first killed off 19,000 jobs, the second 16,000.
With the lax Anti-trust enforcement of the Bush era and the political ascendancy of the idea of the unregulated market, we have managed to place ourselves back into a situation similar to the one at the beginning of the 20th Century. We have businesses that are so big they can control entire markets. We have companies like Wal-Mart that are so big they can dictate prices to their suppliers.
All of this leads to where we need to go in terms of jobs. We must refocus the economy on the workers again. Not just factory workers, but all the people who do the work of work in this nation. The folks who figure out the cheapest shipment methods, the folks who take a risk and start a small business, the folks who innovate and find the new "it" product.
To fix our employment situation will take more than just big infusions of capital into the economy by the government; we must retool the entire economy by breaking up the monopolies that are strangling the engine of job creation. Just as progressives are unhappy about giving huge amounts of money to the Health Insurance cartel in order to get more of their fellow citizens covered, we should be leery of jobs creation actions that will bolster the giant over consolidated companies. It is time to take a page from Teddy Roosevelt’s book and bust the trusts!
If we narrowly focus on jobs, without looking at the larger picture of why the jobs market is broken we will only treat the symptom. While unemployment is an important symptom to treat (there can be no doubt about that) lets not treat it, lets act to cure the underlying problems that gave us a growing economy in the early 2000’s but no net jobs growth.
If we are going to spend hundreds of billions to get our nation working again (and we will have to) then lets spend it in a way that puts the economy on a sound footing for decades to come. The way to do that is to put real competition back into the system and allow no company to grow to the point where it can dominate its entire market. This is a determent to the consumer and the worker alike.
The floor is yours.