Most suggestions have little hope of helping America's unemployed any time soon
Over the past week, this space has hosted a substantial number of thinkers proposing solutions to America's job crisis. And, let's face it, the Atlantic isn't alone. From Businessweek to Newsweek, it's easy to find ideas to improve the moribund economy. If they don't repeat themselves word-for-word, at least they rhyme. Raise immigration, reduce regulation, reform taxation, reinvigorate education.
But like a blood-brain barrier for job solutions, the ideas floating around Washington think tanks can't seem to travel into the central economy. They're either too radical to be practical, too expensive to be possible, too far-sighted to make a difference today, or too small to make much of a difference, period.
Urban policy experts like to focus on growing manufacturing, green jobs, and exports. These are all strong ideas, but their time-frame is too long, and their overall impact is too small, to make a difference in the next year or two. For example, the green economy is an optimistic goal, but we added only 600,000 "green jobs" in the last seven years. Meanwhile, there are 14 million unemployed workers.America faces a job crisis of the here and now. Unfortunately, many solutions seem better suited to reduce the unemployment of 2031 than of 2011. At an event co-hosted by the Atlantic and underwritten by McKinsey & Company, several education pundits said the weak recovery demanded a stronger school system. Stronger education is a solution with no downside. It invests in human capital, pays off in dividends for workers, and helps to close the "skills gap" that some economists suspect could be keeping millions of workers out of a job today.
But education is, by definition, a long-term investment. Setting up a school system closer to the German model might well be a good idea, but even if you started a vocational high-school today, you wouldn't see the first graduates until June, 2016. There's no doubt that education builds the wealth of future generations, or that U.S. education has its deficiencies. Still, it's hard to imagine how any schools restructuring can help a laid-off steel worker today.
IDEAS, BUT NOT VOTES
If the boldest ideas suffer from a lack of immediacy, the most realistic ideas suffer from a lack of political will. In Congress, there is neither appetite for new deficit spending nor a will to raise taxes to make new spending deficit-neutral. In the Fed, Ben Bernanke has pulled the reins on monetary stimulus pending a huge stock market collapse. Jobs bills won't pass Congress, and further stimulus won't come from the central bank.
Then there are calls to create jobs by cutting regulations. The Chamber of Commerce identifies some 1.9 million energy jobs currently being held up by governmental qualms. Unfortunately, one man's "unnecessary regulation" is another man's protection. In the Chamber's study, for instance, one third of the projects are coal plants -- great for consumers and employees, not so hot for those who have to live downwind.
If there is a reason for optimism, it is that even if the Congress doesn't move forward, time will. Consumers will return. Homes will sell. Jobs will trickle back. And long-term investments will, ultimately, bear fruit. Even sectors amounting to small fractions of the U.S. economy can, in combination, create large numbers of jobs. As McKinsey's Susan Lund estimates, today's U.S. economy is on track to replace all the jobs lost in the recession.