Obama’s Employment Legacy: Anemic and Insufficient January 6, 2017Posted by geoff in Economics, News, Obama's Legacy.
Y’all may recall last month, where we noted that while the president has been bragging about his consecutive months of job creation (which has never been an economic metric in the history of man, ever), but it turned out that the vast majority of new jobs (94%!) were part-time.
But that should come as no surprise to long-time readers of this blog, because we’ve been ignoring part-time jobs since we started the new chart in 2010. And when you ignore part-time jobs and account for population growth, the employment picture looks like this:
You can see that after Obama’s eight years, he’s only gotten us halfway back to where we were in 2004 (which I consider more “normal” than the rise just before the crash). Some legacy.
The disturbing part is that we’ve been going nowhere for a year. That combined with the recent announcements of store closures and layoffs by Sears, Kohl’s, and Macy’s, makes me concerned about the jobs picture.
Trump, at least, seems to have given a high priority to jobs retention and creation. And his strategy for employment is completely different than Obama’s: rather than emphasizing education and training programs, he’s emphasizing improving the business environment, and using that as an incentive (cudgel, bribe, whatever) to convince companies to stay and grow in the US.
In R&D we have the concept of technology “push” vs. demand “pull.” Technology push means you develop a technology or product that the market hasn’t yet asked for. It might be a revolutionary, paradigm-changing technology, but most often it’s a dud in the marketplace, because nobody needs it.* A more reliable strategy, by far, is to allow the needs of the market to pull the technology forward. I.e., you develop technologies to meet the demands of the market. Not as innovative or revolutionary, but in the end the consumers are happy and the developers are paid.
Trump’s and Obama’s approaches are similar, I think. Obama is on the “push” side, developing employees in the hope that somebody will “buy” them. Trump is on the “pull” side, increasing demand and assuming that the education & training systems will respond to meet that demand.
The disadvantage is that is can take several years for the education and training systems to respond, but the disadvantage of Obama’s approach is that all that training & education is futile if the demand doesn’t exist or if you don’t correctly predict where that demand will be.
All in all, I think I have far more faith in Trump’s approach.
*True confessions: I’m an inveterate technology pusher. The hell with those customers who don’t know what’s good for them! That’s why I’m a poor, poor technology pusher. But, like the scorpion crossing the river on the back of the frog, it’s just my nature.