Economic Expansion and Jobs: Is there a link?

We operate under the impression that the past continues to repeat itself and therefore patterns can be traced and the leveraged to make more informed decisions when a similar scenario presents itself.  But what if the scenario is the same but the architecture that has repeated itself for years has changed, possibly without the world recognizing it?  We have heard consistent comments and dialogue over the past year of the jobless recovery - where are all the jobs people keep asking?  I sit back and question the same, but the picture seems clearer and more concise than most people want to admit.  IT IS POSSIBLE TO HAVE ECONOMIC RECOVERY AND EXPANSION WITHOUT A STRONG GROWTH IN OVERALL JOB INCREASE.  Now for the traditional professional, one might question the theory however the facts are straight forward.  The economic links that are drivers across the international community no longer are connected in the same manner allowing for actions to take place without the traditional or expected reactions.  The economic expansion and job increase link is now broken, let’s take a look at why.


Major factors that contribute to the link being broken are the business verticals that drive economic recovery have changed, business is now completely capable of being integrated worldwide, and the US is no longer the sole economic driver in world economics.  To address these in short, let us look at each individually.


Business has changed over the past 100 years in such a wave that it is impossible to track all of the major impacts.  For the purposes of this article, let us look at the traditional business model of the 1900s - industrial based production.  Industrial business was the core and foundation of US growth over the past decades.  The focus on the development and production of major products laid the tracks for a business synergy of supply and demand.  Major products consistent of trains, railroads, steel, appliances, houses, etc. all were part of the wealth generation that pressed the US forward during the industrial business generation.  When people needed more products, companies hired more people to fulfill the demand.  But now, the focus has changed - businesses are no longer industrial, they are knowledge based.  With an ever increasing knowledge base the increase of jobs actually goes in reverse with less people capable of doing more work.


Worldwide Integration is the secondary major component of the jobless recovery.  Most Americans believe that good jobs are not available or coming around anytime soon.  They might be right if they are looking for the traditional manufacturing positions.  Manufacturing has become a worldwide business allowing global enterprise to leverage low cost wages to sure up profits in the production of their profits.  So are the jobs coming with the increase in demand?  YES.  But the better question is where they are being generated and the answer is not in the US.  International companies exploit low wage countries to handle production keeping the knowledge based work here in the US thus increasing jobs however not on a local basis for people to see.


Lastly, the US has ceased being the center of all economic decisions in the world.  Albeit, still the leader in GDP, debt and other government policies have hindered the ability for the US to remain competitive in a global market.  These reasons are far too elaborate to discuss in this brief however trade policies, currency manipulation and off-shoring certainly play their part.  Americans need to review the political leaders that allow for the most structured collaboration with other countries however with the same protection based policies other countries build into their agreements ensuring national security and prosperity. 


The game is not over, but the results are very real.  The stakes could not be higher and one must ask what is next.  As a country we must address all of the three major factors listed above in a cohesive plan that allows business focus to have more local opportunity and lead government to develop policies where the US can compete fairly.  This will not be an easy walk, nor a short path.  The requirement of people to stay the course, remain informed, and elect the right people sounds simple but it is far from.  Start at the local level with yourselves, and then move to the city, then state, regional and national.  A formalized plan can work but it requires more than just "a movement", we require a structural re-design.


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