The news about jobs is getting better. The unemployment rate dipped for the fifth straight month to 8.3 percent. The number of jobs being created has been rising at a rate of 200,000 each month, topped by 243,000 jobs added in January alone.
That is great news for the economy and fuel for a surge on Wall Street, where the Nasdaq hit an 11-year high and the Dow Jones Industrial Average reached a peak not seen since 2008.
Does this mean the U.S. economy has found a cure for the recession or a strategy to relieve and mask the symptoms of a deeper, more serious problem? The truth is that it’s likely a little of both. Unfortunately that means that sooner than later the problem will resurface, much like an untreated cancer eventually weakens and destroys the functions of the body.
Much of our unemployment since the recession has been the result of massive layoffs in construction and manufacturing. Creating new jobs in manufacturing, according to many politicos, bureaucrats, economists, and executives, are the key to our recovery. With more people working, more consumption will take place and more homes will be built and purchased, putting millions of unemployed construction workers back to work. That all makes sense.
Except (you likely knew that was coming)… that the manufacturing jobs we need to create aren’t the manufacturing jobs that existed pre-2008. We don’t need workers to just make things. We need workers who make the things that make things and then make those “thing-makers” work in seamless integrated systems.
And that’s the problem. We have a lot of people who are really good at making things. But so does the rest of the world…and they are willing to work more hours for less money. That’s one reason why the U.S. economy is struggling to create jobs. To compete, many of the old manufacturing jobs are gone forever. If those jobs exist, they have been automated, requiring maybe one worker to do the job of five or ten workers just a few years ago. In other words, we could have our manufacturing output humming at record levels and still employ a fraction of the workers that did the same job 10 years ago.
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What the U.S. does better than anyone else in the world is make the things that make things. Unfortunately we don’t have enough of those skilled workers or the workers who can service those thing-makers. We need workers who can spot a faulty circuit board, not count nuts and bolts. We need workers who can design, troubleshoot and repair a defective robotic arm, not manufacture the components of the robot.
For politicians and especially low skill workers, that situation places job creation at a painful crossroad. For millions of workers over the past few decades, low skill jobs were the ticket to the middle class and upward mobility. But that has all changed. Good paying careers dependent on low skill workers are gone. That leaves tens of millions of past and future workers stuck in jobs that offer at best bare bone living wages and no future.
To create jobs that ensure workers can earn a living wage and entertain the possibility of moving up requires answers to three interrelated questions:
- What products should be made and supported in the U.S.?
- What jobs can and should be created that provide good living wages, upward mobility, and still keep the U.S. competitive?
- What needs to be done to train and re-train millions of low-skilled and under-skilled U.S. workers to do these jobs?
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The order in which we answer the questions is critical. We first must determine what products (or services) should be made in the U.S. Unfortunately we seem to be attempting to solve the job creation problem in reverse order. We want to train and re-train for many jobs that might be obsolete or become low-paying in the very near future. And not all jobs that might be created help the U.S. become or remain competitive.
The U.S. is at the proverbial fork in the road. What road should we take? What products and services should be make and support?