Tuesday, January 4, 2011
Yesterday CNN/Money had this news article tease: "After three years of economic pain, a growing number of economists think 2011 will finally bring what everyone's been hoping for: More jobs and a self-sustaining recovery."
Let's put aside the fact that today AP news reported this: "Unemployment rates rose in more than two-thirds of the nation's largest metro areas in November, a sharp reversal from the previous month and the most since June. Unemployment rates rose in 258 of the 372 largest cities, fell in 88 and remained the same in 26. That's worse than the previous month, when rates fell in 200 areas and rose in 108... employers have been reluctant to create jobs"
For argument sake, let's say the economists are correct and 2011 will bring many more jobs, let's look at this in a logical, non-emotional way- Where exactly are these 'jobs' coming from & what type of jobs will these be?
Will it come from the housing/building sector? It's facing a double-dip due to a drop in prices brought on by a glut of newly built & foreclosed homes which can't be sold due to lack of buyers or banks unwilling to lend. Home building is predicted to be very slow for 2011 and on the commercial property front, with that area having its own financial struggles, there is also little to no need for more shopping plazas to be built.
Will it come from manufacturing? To be honest, America really doesn't have a manufacturing capacity anymore compared with even 10-15yrs ago and I don't see American worker wages ever being competitive with Nigeria and Vietnam. One should not expect iPads or shirts with little pony playing horseys made in the US any time soon.
Will it come from government? Perhaps on the Federal level, but certainly it won't be coming from the state and local levels. Many cities and states are in deep financial crisis-mode. Some cities have already cut back on police and firefighters. It would be more realistic to see people let off work than to see local and state governments hiring the unemployed.
Will it come from banking/finance? Perhaps so, though most low-level and clerical jobs in these industries can easily be filled by temps which allows businesses to not pay out health benefits with the flexibility to fire someone at any time for any reason, or really no reason at all. The more specialized jobs in this field require at least Masters degrees in Business. Lastly, understand that while the banking industry have been getting hundreds of billions of dollars in free stimulus, this was not meant for job creation- this is to help get rid of Trillions of dollars of toxic debts on their balance sheets while boosting the Stock Market to convey 'confidence' to investors.
One area that does keep growing is medical, especially as the "Baby Boomers" hit 65 years old. And as a plus, overall these jobs do pay well. Most of these jobs are either very specialized in skill or require quite a bit of education and expense to obtain proficient degrees and licencing. And of course, when a career field is expanding, expect stiff competition.
Another area of possible expansion is referred to as 'green' jobs which deal with employment supporting the solar, wind, biomass, hydro, hydrogen and fuel cell industries. If the Administration is seriously committed to this and puts more money into this field then, yes, this will be a good area for job creation and growth over time.
Beyond the medical field & 'green' jobs, the most realistic areas for expanded employment are fast-food industry, all-in-one shopping stores like Wal-Mart & Target and travel/tourism related areas like hotel staff, housekeepers, etc. These are typically jobs that pay between $15k-$22k, yr which really is not enough money to live without acquiring 2nd or 3rd jobs to supplement that income.
Of course the best and quickest way to get hired is simply to hire yourself, meaning to start your own business even if its on a small scale. Though, it would be nice if government worked with you instead of against you in this endeavor.
I want to provide an excerpt of a book recently written by Jonathan Alter entitled "The Promise- President Obama, Year One". The below passage deals with interactions between Larry Summers, who was Obama's Director of the White House National Economic Council, Rahm Emanuel, White House Chief of Staff, and David Axelrod, Obama's Press Secretary--
"The inability to pivot in 2010 to a single-minded focus on jobs was a by-product of what one senior aide called "dysfunction" between Emanuel, Summers, and Axelrod. Rahm had always admired Larry, but he was becoming exasperated with his failure to give him a jobs plan he could sell. 'Week after week, Rahm would say, 'Let's explore this' or 'How about that?' and Larry would slow-walk everything,' recalled one senior advisor. 'He basically doesn't believe in the government helping small business'."
Summers is no longer in the Obama Administration but that was the official mindset for the past two years-- Corporations get all the focus & let small business eat cake.
If all these overly-optimistic economists are going to be correct about increased job growth for 2011, its going to be Only because the mindset in government completely changes into a singular focus on quality job creation that involves direct or indirect bailing out of small businesses and 'Main Street'. Otherwise, to borrow a cutesy expression, all these trumpeted forecasts of economic growth and job recovery in the news are pure poppycock.
Posted by Susquehanna at Tuesday, January 04, 2011