Obama and the myth of job creation is a story designed for debate. The basic argument is that job creation comes from the supplier–the worker–not from government nor from companies.
When we imagine that government – and even companies – “create” jobs, we’re missing half the story: the crucial part. The part that most of us can actually influence, right now.
It’s a paradox, but job seekers are actually job creators. People (and the politicians that love their votes) tend to focus on how many employers happen to be hiring. But an overlooked tenet of labor economics says that what’s equally vital to creating jobs is the presence of an adequately skilled workforce capable of filling them.
In other words, when the workers are ready, the jobs appear.
The author goes on to describe the diffferent ways that job-seekers can retrain themselves for a new career. I have sympathy for the argument, but I think the point is overstated, and–like the article says–it is “missing half the story.”
One point that needs to be made, supply-side incentives can also be encouraged through government and business, not only through the extra dedication of the worker. Secondly, retraining and retooling are solutions for an economy suffering from structural unemployment, but not from cyclical or demand-deficient unemployment. There are some structural elements of the unemployment in US and Europe, but I think most would agree that a lack of investment and consumer spending are the biggest problems.
The article closes with, “a few steps to create sustainable job growth.”
- redefine the idea af a job to include contract work and free agency
- retool, quickly and regularly
- redesign unemployment benefits (like Friedman’s Negative Income Tax)
- welcome free trade
- recognize immigration for the competitive advantage it is
Any free-market economist would agree that all of these steps would probably be positive, but now it all seems contrary to the earlier part of the article. How do we change these things without government policy? Government needs to play a role, but maybe a different role than we have seen lately.
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