Job Creation 2.0

When talk of jobs is mentioned, rarely do we hear President-elect Obama break down the different segments of his 2.5m (recently updated 3m) plan.  There are in fact three distinct segments that make up any jobs “creation” statement:

 

Jobs Retained: (my estimate through 2011 = 2.5 million)

This might be the most important segment and must take priority over the others.  With 2.7m+ jobs lost during the past year and 533k lost last month, there must be actions taken to stop the bleeding.  This is where tax policy will have its strongest effect.  Positive change to payroll/corporate and capital gains taxes will enable corporations and entrepreneurs keep the good people they have on board.  The situation in Chicago shows that an owner wants to pay his workers but is unable to thus they resulted in a lock-in.  Sometimes people are caught empty-handed by pure market factors and not by corporate malfeasance.

 

Jobs Filled: (my estimate through 2011 = 2 million)

There a millions of open requisitions at thousands of companies in America.  The problem is that there is no efficient and effective way to match the job seeker with the positions that match their skills.  Even the U.S. Govt has tens of thousands of job postings on Usajobs.com that have been open for months.  Hotjobs.com, careerbuilder.com, jobs.com and many others do not live up to their names for 80% of job seekers.  The Govt must first fine tune its own jobs postings, fill them, and then reach out to other databases and sources.

 

Jobs Created (new): (my estimate through 2011 = 1 million)

This is the trickiest segment of the three.  Even if billions of dollars are poured into highway infrastructure, will there really be new jobs created or will existing contractors use this “new” contract money to retain people?  It could depend on the size of the new contracts.  It could also depend on the contract language and terms that must be included.  I suggest new contracts be written with a clause that requires contractors to hire 1 employee per $200K of contract value.  This could be the silent hand that forces job creation.

 

Given those points, I expect a job target of 5-5.5m is necessary to restore economic confidence in America.  With 2.7m+ lost in the past 12 months, a 3m increase in the next 2 years will have a minimal effect.  I think that HBS Professor Jim Haskett is right in calling for “stretch” management to be instituted at American companies.  In this sense the Govt would be the beneficiary of this GE concept.

 

Your thoughts?

Advertisements

0 Responses to “Job Creation 2.0”



  1. Leave a Comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s





%d bloggers like this: