Michael Kim landed his job as HomeAway expands to meet growing demand for its online house-rental service.
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Even so, there is a clear trend emerging: tomorrow's jobs will require people to add more value than ever before. Consider Samsung's only semiconductor-fabrication plant outside South Korea, which sits in northeast Austin. Since the fall, the factory, which makes flash memory for devices like smart phones and iPods, has been undergoing a $500 million upgrade. In advance of the plant's early-summer reopening, Samsung will hire about 200 engineers and technicians to run and service the new, more sophisticated equipment inside. But with the new factory and those new jobs, 500 other positions have been eliminated: robots, not people, will now transport silicon wafers.
That's actually not so awful, economically speaking. Innovation and increased efficiency are the lifeblood of any economy. But it does mean that as we tackle the topic of creating jobs, we must realize that the sustainable ones will be those that build from a human being's unique abilities, like problem solving and creativity. If we want to encourage high-quality-job creation, we need to find a way to enable economic evolution. We need to set the stage for companies to create tomorrow's goods and services, and we need to be prepared to support workers in their quest to adapt.
Washington Isn't the Answer
In Washington, the bulk of the response to job loss has been to drum up short-term demand. Last year's stimulus package kept the economy from spiraling further downward. Current proposals to extend unemployment benefits and send $100 billion to struggling local governments would have a similar effect — allowing consumers and cities to keep on spending.
Tax cuts for businesses that hire — and then retain — workers will likely wind up doing more of the same. No businessman in his right mind is going to add the long-term liability of a worker simply for the short-term benefit of a tax break. On the other hand, such incentives may accelerate some hiring that would have eventually happened anyway, and that would put more money into consumers' pockets faster. Of course, extra spending and tax cuts contribute to the $1.5 trillion federal deficit, and that drags on the economy.
Easing the flow of credit, especially to small businesses, has also been a major policy push — and a tricky one to size up. The efficient reallocation of capital is key to any economy but especially to one like the U.S.'s, which counts on dynamism as a competitive advantage. Lending to businesses is down; that much is true. But is that because banks are overly cautious and asset-impaired or because businesses are uncertain about the future — or just aren't creditworthy borrowers? A recent survey by the National Federation of Independent Business found that companies that couldn't borrow typically had declining sales or depressed real estate values. Simply opening the lending spigot doesn't seem to be the answer.
All these ideas are short-term. That's understandable. People who are out of work want immediate solutions. Politicians wouldn't be doing their jobs if they didn't try to give voters what they want.
The conundrum is that the most useful things government can do to encourage job growth aren't flashy initiatives with quickly visible results. "There's no magic wand we can wave over companies that will induce them to go out and hire people," says Matthew Slaughter, an economist at Dartmouth's Tuck School of Business. "We need to think long-term."
If Congress wants more and better jobs in the U.S., it should do things like create a permanent tax break for companies that invest in research and development, make it easier for foreigners who get science and engineering Ph.D.s at American universities to stick around after graduation, and spend serious time and money improving the nation's infrastructure, including the electric grid and broadband network. Such initiatives will not create many jobs that can be tallied on a spreadsheet. What they will do is more important: lay the groundwork for businesses to innovate and grow.
The same is true on the worker side of the equation. If the key characteristics of the American economy are flexibility and forward motion, then we would all be better off if people felt more support — both financial and social — to invest in their education, switch jobs and industries and venture out to start new firms.
Establishing job creation as a discrete goal is a misleading enterprise. Beyond cyclic swings in demand, what we're really talking about creating is not jobs but ideas and technologies and more efficient ways of producing and selling goods and services. If that sounds like a harder goal to set, let alone achieve, that's because it is.
Yet as Austin richly illustrates, in the wake of the worst economic downturn in generations, that sort of innovation is starting to happen. And from that, the jobs will follow.