The White House today announced a new jobs initiative that will create 180,000 youth employment opportunities in the summer of 2012. At a time when our economy is still struggling to fully recover and most of the mainstream media is obsessed with the primary season, it was encouraging to hear the focus, even for a day, shift to the sluggish jobs market. However, our seemingly-stalled recovery is still troubling; we have moved well beyond the normal period of time when the economy should be surging back to full strength. What is the root cause of our ailing jobs market?
As it turns out, 20% of gross job production comes from not just small business, but young businesses. Businesses that are less than 5 years old have one of the highest rates of job creation because, in their desire to rapidly expand, they are desirous of growing their production rates as rapidly as possible.
But now we have run into a problem: old businesses that have established themselves firmly in the driver’s seat are preventing the new, young businesses from getting a foot in the door. How? Lobbyists for those entrenched special interests. Money goes to politicians, who in turn craft laws and policies that reflect the contributions they received. When the old business would have normally expired in its usefulness or viability in the market, they are able to maintain a hold much longer because new businesses to replace them don’t come.
It wouldn’t be fair to say old business and lobbyists are the only cause of the problem; many companies complain, even today, of having positions available that they can’t fill because there are not enough skilled laborers. Which points, in turn, to a failing in our education system. If we aren’t turning out skilled laborers that can compete in today’s market, then it is unfair to point only to the failed job creators as the sole problem.
Again, it is refreshing to hear the conversation turn to jobs, and every one of those 180,000 youth positions will be greatly appreciated. While it is a step in the right direction, we still need to address the overarching problems that are restricting our economy. For the full discussion:
Ed Crooks is energy editor at the Financial Times. Brennan Lowery is a digital producer for The Dylan Ratigan Show.