Yo, Washington. Remember that other problem? Hint: It starts with a J.
While our distinguished representatives inside the Beltway have been battling over how to cut government spending, they've been doing precious little to address a more immediate problem: a chronic lack of jobs. More than two years after the so-called recovery began, there are still 14 million unemployed Americans, and perhaps just as many who don't even bother to look for work any more. The percentage of adults who consider themselves part of the labor force is the lowest in 27 years. Chronic unemployment threatens the whole economy—not just the jobless—because it depresses demand for homes, consumer goods and many other things. The economy can't grow if Americans don't spend.
Washington could enact more stimulus plans, but that would require some tough decisions and a bipartisan agreement to put America's interests above those of its politicians—not exactly Washington's strong suit. So here are 10 ideas for creating jobs that ought not require billions in stimulus spending, cantankerous negotiations, or odious political posturing:
Steer more students into technical schools. Although education is more important than ever, there are still a lot of jobs that require technical training but not a college degree, such as dental hygienists, paralegals, welders, electricians, and a variety of medical technicians. Education journalist Dana Goldstein recommends exposing students to technical schools while they're in high school, instead of hoping they find their way to such a school later on. Schools could also work with local employers to develop more internships and other programs meant to give high schoolers a taste of the working world, beyond fast food or mall jobs. "Students are less likely to drop out and more likely to enjoy school," Goldstein writes, "when they see their classes as relevant to their future." And employers would get a chance to mold the kinds of workers they need.
Enhance the payoff of a college degree. Too many students earn degrees in arts, literature and social sciences, while there's a shortage of math, science, and engineering grads. Parents and educators could do a much better job of guiding kids into fields where the jobs are, which would raise the payback for getting a college degree and encourage more to attend. Consulting firm McKinsey predicts that by 2020, there will be a shortage of 1.5 million college graduates. So education will get more important, not less. Colleges could help by offering more three-year programs and other ways to cut costs. A new website sponsored by the Dept. of Education lists the cost of tuition at hundreds of colleges, a nice step toward helping families comparison-shop and get the best value for their education dollar.
Help small businesses find foreign customers. Big companies have taken full advantage of globalization, but small businesses have a much harder time finding foreign markets for their products. Cities could help by setting up outreach groups meant to promote local businesses overseas and help them find foreign customers. In many cities, larger firms based nearby could act as a sort of "big brother," sharing connections and market intelligence with smaller firms that have fewer resources. The government need only function as a matchmaker, leaving businesses to negotiate and close their own deals.
Welcome more immigrants. The land of the free turns away many immigrants who might be productive contributors to the U.S. economy, because of limits on work visas and general fear of foreigners. That's an economic loss, because immigrants have historically created businesses at a higher rate than home-grown Americans—including some big ones, like Google and Intel. Sensible proposals might allow more foreigners to stay in the country after earning a college or graduate degree or committing money to start a business. Washington could easily raise the allowed number of work visas, or eliminate the quota entirely, to encourage more scientists and engineers to stay here instead of bringing their talents back to their home countries. Note to xenophones: These ideas are unrelated to the much more controversial debate over how to address illegal immigration.
Create a national jobs database. There's a growing gap between the skills workers have and the skills that companies need, which is one reason many people end up out of work so long. There are thousands of unemployed construction workers, for instance, yet there's a shortage of well-trained technicians in some manufacturing specialties. Regional disparities complicate this mismatch, since workers who might be willing to get retrained don't know where to go to find jobs. In a McKinsey survey, two-thirds of companies said they can't find all the workers they need, with many of them leaving jobs unfilled for six months or more.
A national jobs database could offer detailed, centralized information on what kinds of jobs are available by county or city, to help workers figure out if there's demand for their skills where they live, or whether they need to move or get retrained. The government might be able to do it, but if not, why not a tech-savvy private company sponsored by venture capital? Imagine a website or tablet app that lets you click on a map, type in a keyword and find jobs by specialty by region. Some job-research sites approach this level of functionality, but they're generally serving employers, not aiming to fix a long-term jobs shortage.
Create "lean" regulatory agencies. In many places, business owners must deal with redundant layers of red tape that cost time and money and generate nothing of value. Beginning with local government, regulatory agencies could operate more like "lean" companies, with streamlined procedures, firm deadlines for completing their work and a mandate to weed out needless rules. Thinning out regulatory agencies could also help trim government rolls, which is happening anyway.
Speed the foreclosure epidemic. Five years into the housing bust, Washington still hasn't come up with a meaningful way to aid thousands of distressed homeowners. This is a complex problem with no easy solution, but it's also extremely important because the depressed housing sector is a huge drag on the economy. And the government could take more radical action instead of simply hoping that banks offer relief to underwater homeowners or the problem works itself out eventually.
The government, for example, could buy distressed mortgages from banks, and arrange workouts with borrowers that help keep them in their homes. Or it could buy vacant or foreclosed properties outright, then sell them later when the market improves. Or it could create new incentives for banks to deal with foreclosures more speedily. State governments could do it too. An effective foreclosure-mitigation program would require some tolerance of homeowner bailouts and the risk of wasted taxpayer funds. But it might be worth it. Without any new effort to turn housing around, it could easily take until 2014 before this significant industry begins to create a meaningful number of jobs.
Copy Germany. The recession in Germany was even more severe than it was in the United States, yet employment there has stayed steady, with the jobless rate lower now than it was before the recession. The U.S. unemployment rate, meanwhile, is more than four percentage points higher than it was before the recession. To combat that, McKinsey suggests copying several policies that have been effective in Germany. The government could offer a tax credit or subsidy to companies that hire somebody who's been unemployed for longer than a year. A "mini jobs" program could bring part-time work to students, older workers and others who can't find full-time work. Germany has also created a series of highly focused local employment agencies that help the jobless find work that matches their skills, instead of simply posting job openings. The centerpiece of the U.S. system, by contrast, is unemployment insurance, which puts needed money in many people's pockets but also creates an incentive to stay on the sidelines.
Draw more tourists. Tourism is big business—and the United States has been losing market share. Even though international travel is booming, the number of overseas visitors to the United States is about the same as it was in 2000. The government could boost tourism here by streamlining the visa process for foreigners and aggressively promoting travel to America in foreign cities. Many barriers to entering the United States went up after the 9-11 terrorist attacks, but now, the rollback of al Qaeda and other terrorist groups may warrant a review of those strictures.
Lure American companies back home. Some U.S. companies that sent jobs overseas 10 or 15 years ago are thinking about bringing them back, since a weak dollar and an oversupply of workers here has made U.S. labor costs more competitive. Silicon Valley entrepreneur Sramana Mitra, who runs a startup support group called One Million by One Million, believes that the two-decade outsourcing trend may soon be reversed. She recommends that state and city governments roll out tax breaks and other incentives to nudge companies back toward America. A friendly gesture or two from Washington wouldn't hurt, either.