Unemployment is scratching 10 percent and the Obama administration is fending off accusations that the president's policies are anti-business. So BusinessWeek sat down with Obama to talk to him about how exactly he planned to find jobs for six million Americans in the next few years. What can we learn from the interview? It's clear that Obama knows where the job market is heading.
Here's Obama answering a question about what he's learned from business leaders. Italics mine:
The last lunch that I had, I guess we had the CEOs of Xerox, AT&T, Honeywell, and Coke. We talked about the fact that, in the 1980s, when everybody was afraid Japan was going to eat our lunch, a lot of companies did a 180 in terms of quality improvement, efficiency, increasing productivity. There was a change in corporate culture that significantly boosted corporate productivity for a long time and helped create the boom of the '90s. What they pointed out was, there were a couple of sectors that were resistant to that: health care, education, energy, and government.
Health care, education, energy and government. The four sectors that fell behind the eight-ball according to CEOs are also the sectors projected to grow the fastest in the next generation.
Two weeks ago, the Council of Economic Advisers released a report (that's the PDF) on the job economy of the future. In a nutshell, here it is: Health care will dominate, construction on eco-friendly projects will soar, and the education sector will continue to grow. Or if you prefer pictures, the provide this graph showing the industries with the highest projected job growth until 2016. Four of the top five sectors are health care, construction and education.
Astute readers might say: "Derek, of course Obama parroted the findings of the CEA -- they're his Council of Economic Advisers." So the last graph you have to see (for which I should really start paying Michael Mandel royalties) shows that the explosion of health care and education jobs isn't just a unique feature of the CEA report. It's the world that we live in. In the last ten years, job growth in the Health-Ed-Gov sector has grown significantly, while we've lost jobs in rest of the economy.
How do we fix this? We can't subsidize the recession-era construction of LEED-certified buildings forever, and the president says we can't afford to live on the exponential curve of health care spending. If Obama is smart, he understands the limits of government involvement. Sure, providing a $4 billion sweepstakes for state education programs is a good way to incentivize investments in science curricula, and expanding federal training programs can help direct the job economy too. But ultimately this will be an issue of private sector innovation, an area over which Obama can only cast his shadow so far.