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Will Obama’s Job Council Create Jobs? Part 1

Thu, 04/19/2012 - 6:12am
MICHAEL P. COLLINS, Author, Saving American Manufacturing

By MICHAEL P. COLLINS, Author, Saving American Manufacturing

Mike Collins ImageBack in 1979, there were 19.5 million manufacturing jobs in the U.S. Today, there are 11.6 million. That represents a decline of 40 percent during a time period when our overall population experienced tremendous growth. With the crash of 2007, another 20 million jobs were lost in the economy.

As a response to unemployment, President Obama created the Council on Jobs and Competitiveness (Jobs Council). Its mission is to provide non-partisan advice to the President on continuing to strengthen the nation's economy and ensure the competitiveness of the U.S., and on ways to create jobs, opportunity and prosperity for the American people.

The Jobs Council is supposed to work collaboratively with all agencies and offices within the executive office of the President toward the fulfillment of these goals. The 26-member jobs council has set a specific goal for companies to create 1 million jobs within two years by approximately February 2013.

Council Recommendations

Over the last year, the council has released recommendations detailing how the U.S. can be more competitive. The recommendations include:

  1. More drilling for oil and natural gas. The Jobs Council called upon the White House to consider "expanding and expediting the domestic production of fossil fuels — including allowing more access to oil, gas and coal opportunities on federal lands."
  2. Investing in education. There is some vague language about improving education, but there is a specific recommendation to develop training partnerships with community colleges and vocational schools to help fill what they said were more than 2 million job openings in advanced manufacturing in the U.S. But the recommendation does not spell out the type or length of training.
  3. Reforming the tax code. “Among the steps the council sees as urgently needed is long delayed reform of the corporate tax system, which it says is outdated, and hurts both business competitiveness and American workers. The panel calls for lowering corporate tax breaks to internationally competitive levels, while broadening the tax base by eliminating tax deduction and loopholes.” [1]
  4. Research and development. The council also wants tax breaks for private industry engaged in research and development.
  5. Reforming regulatory systems. Although there are a lot of general complaints about government regulation, the recommendations specifically focuses on streamlining the federal permit process for construction and infrastructure projects.
  6. Investing aggressively in infrastructure and energy. Encourage the retrofitting of commercial buildings to be more energy-efficient, creating additional construction jobs.
  7. High-growth enterprises. Targeting high-growth enterprises that create new jobs, such as startups and small firms.
  8. Increasing travel and tourism industry jobs. The recommendation specifically asks to make it easier for foreigners to get visas to visit the U.S. and spend their money.
  9. Small business administration (SBA) loans. Make it easier for companies to obtain SBA funding. How many times have we heard this request over the last five decades? Getting loans from any government agency is still problematic, and the bureaucracy problems and loan procedures haven’t been solved yet. (I would not hold my breath.)
  10. Supporting the manufacturing sector. I agree with the report’s emphasis on the role of a vibrant and growing manufacturing sector in supporting a strong middle class, and a healthy, innovative U.S. economy. But, there are no real specific recommendations to do this, and small and midsize manufacturers, which are 96 percent of all manufacturers, are left out.

What Chance Is There to Create Real Jobs?

“In January 2011, President Obama chartered the Jobs and Competitiveness Council with a mission of leaving "no stone unturned" in the search for ways to boost the country's anemic job growth. But you could tell from the start that this council would have trouble even finding those stones, let alone turning them over.” [2]

President Obama says he's 100 percent focused these days on creating jobs. “It’s critical for us to have input from folks who are actually hiring, putting people to work, making payroll, making the products and services that make our economy so powerful. But, we want to make sure that we narrowed the focus to think about how we ensure that we're putting people to work right now.” [3] The President is making the case that the creation of actual jobs is more important than longer term efforts to create a more job conducive environment. So the big question is what chance does this council have of creating 1 million new jobs by February 2013?

Who Is on the Committee?

The 26-member committee is dominated by 10 large multi-national corporations, including GE, Citi Group, Intel, BNSF Railway, American Express, Xerox Corp., NextEra Energy, Southwest Airlines, DuPont Inc, Procter and Gamble, and Boeing Co. How can we assume that the 10 largest corporations on the council are going to suddenly create jobs in the U.S. when they have such a poor record of job creation? An analysis by ABC News found that the 10 largest companies represented on the Council on Jobs and Competitiveness has lost some 91,206 jobs since January 2009. [4]

[1] Obama Jobs Panel pushes tax reform, U.S. Drilling, The Economic Times, Jan. 27, 2012

[2] Bloomberg, The Washington Post, Good for Obama’s jobs council, good for America, By: Jia Lynn Yang, Published: June 13, 2011

[3] Portfolio.com, Feb. 24, 2011, 5:26 p.m. EDT

[4] ABC News, By: Susanna Kim (@skimm), Oct. 12, 2011

Tune into the Chemical Equipment Daily for part two of this two-part series. Michael P. Collins is the author of the book Saving American Manufacturing. You can find more related articles on his website via www.mpcmgt.com.

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