The stock market is up, the economic news is cheerful, and people are calling an end to the recession by 2010. However with all of this, what has happened to the jobs that were to be created with stimulus? What has happened to new jobs overall? The ideas are numerous and the points of views countless on where the jobs are, when we will see them, and in some cases if we will ever see them again.
Searching for the north, the way out of this hole we have placed ourselves in is much more complex than most realize. Looking at the stats, the increased level in the stock market is pure hype with little raw data to justify the momentum. Many are expecting the double dip and the market to return to lower levels. Regardless of your thoughts on the latest news, the focus on newly created jobs in this economy has taken a back seat to the overall recovery. I find it interesting since job creation will fuel the country out of this situation. When a developed country moves away from a industrialized nation and into a consumer driven economy, job creation and growth is the largest single factor in coming out of a recession or down economy.
With all of that to say, where are the jobs? I think there a variety of reasons that drive this fact. Lets look at stimulus as there was hot buzz around all of the money being poured into certain programs and job creation was to surface. Look at the stats from the current administration and how they sold it. Unemployment would be 8.8% without the action of the government and the huge spending. Albeit, unemployment is over 9% nationwide and hovers between 10-12% within 14 states. So why didn’t the money work.
You cannot throw money at an issue with no plan and expect it to simply go away
The legislation around when and where the money was to be spent offered little to create jobs and fuel growth
When the government is looking to spend money, it must come from some resource pool. Whether borrowing or new taxes, this money is reduced from another entity and therefore does not fuel growth, it simply re-distributes where the money is going. FYI – governments are never the best decision makers when it comes to money.
The other large factor in the jobless recovery is efficiency, innovation, and technology. Companies are doing more with less, and now they have been doing it so long – it is becoming the norm. From increased hours, to limited benefits, to less people to achieve the same output – people are used to having and making due with less. The need is not there, therefore the jobs are not created with the same vigor as other post recession periods. Add in outsourcing and off-shoring models and you get the picture.
A jobless recovery is going to require some new innovation and new business segments to address the unemployment situation. Companies will need to expand, driving new initiatives internally and subsequently increase the need for talent. This process is slow and less drastic than simply increasing staff for output requirements. Since we have seen the latter will not occur, we must hope and pray for the creation of new business models that create jobs for today and the future.