Shared from the 2/19/2017 Houston Chronicle eEdition


‘Saving’ jobs is the wrong focus

Public policy must emphasize creating new opportunities for workers, market innovations


Midland, seen here in late 2016, has weathered the oil bust by strengthening efforts aimed at people and paychecks.

Michael Ciaglo photos / Houston Chronicle

In a fluid labor market, thousands of jobs are created and destroyed daily, and the new jobs may bear little resemblance to the old.

UNEMPLOYMENT has been relatively low for months now, but statistics never tell the whole story, and President Trump smartly capitalized during the campaign on the reality of workers left behind by a changing economy.

His crusade against Carrier, Ford and other companies that had announced plans to move jobs overseas began even before he took office. But ultimately —and even in the short term — keeping a handful of manufacturing plants in the United States does not mean large numbers of workers will remain on the factory floor.

If new public policy emphasizes “saving” jobs at the expense of “creating” jobs, the bleeding will continue. Do the math, and it becomes clear that forcing companies to remain in the United States or to retain jobs they planned to cut is, in many cases, a bad business decision.

New jobs will be different

The labor market is fluid. Thousands of jobs are created and destroyed every day, and the new jobs may bear little resemblance to the old jobs.

Many communities already understand this and are shaping their own futures through retraining programs at community colleges, support for entrepreneurs and other efforts aimed at people and paychecks rather than at the industries that defined the 20th century.

Midland is a good example. The West Texas city suffered devastating population losses during earlier oil busts, but this time, as the Houston Chronicle recently reported (“Midland primed for new boom” Page A1, Feb. 5), people stayed even as the Texas economy shed 100,000 energy jobs. Rather than pursue a dwindling number of oil field jobs elsewhere, people remained in Midland to start their own businesses — food truck permits grew 50 percent from 2015 to 2016 — or take lower-paying jobs that went begging during the boom. As hiring picks up, many will return to the oil patch.

But for many, their new jobs in the industry will be different from their old jobs. And there will be fewer jobs, thanks to automation, which previously upended manufacturing and other sectors.

An economy of ideas

Government pressure to hire in the face of these changes makes little economic sense unless the company is also protected in some way — import taxes, import quotas and the like, as the Trump administration is proposing. In that case, the company might be fine, at least for a while, but the rest of us will not be. Responding to pressure or the threat of a critical presidential tweet will mean higher prices for downstream businesses and everyone else.

In a market economy, new ideas and technology create new companies and new markets. The future will come from people with an idea. Witness the histories of Hewlett-Packard and Southwest Airlines, which are not exceptions. Indeed, startup firms are a major source of job creation. Between 1992 and 2005, firms less than one year old created about 3 million net jobs, according to the Kauffman Foundation, while older firms shed about 1 million jobs.

And like those pre-automation jobs in the oilfield, many are gone forever. Consider agriculture and manufacturing — two historically important economic markets. Both have shed millions of jobs over the past 70 years, but productivity has increased.

Worker resilience

Public policy can aid in this transition with an overriding strategy of eliminating the obstacles that prevent people from achieving their goals, directed by their interests and abilities.

Instead of focusing on existing business enterprises, policy should emphasize new tax and regulatory rules that reward risk and reduce barriers to the connection between new ideas and the investment they require.

And local communities must take responsibility for their futures, as well.

Sarah van Gelder offered some examples of that from the Rust Belt, where Trump’s call to restore coal and factory jobs resonated with voters, in her book, “The Revolution Where You Live.” She found people forming farmer’s markets to sell local produce and creating an economy independent of decisions made in Washington, D.C.

That is not so different from Midland’s food truck boom, or the surge in community college enrollment that Texas and other states reported during the 2008 recession. All are about local responses as new technology and industries replace older ones.

Odds are high you do something far different than your parents, and especially your grandparents. Employment policy should redouble efforts to improve worker resilience — including job retraining — so that workers can transition to different occupations without disrupting their ability to generate a robust income.

A renewed emphasis on what works in targeted skill-building, not just an attempt to stem job loss, and a variety of educational initiatives can improve our ability to adapt to the challenges we face.

Granato is executive director of the Hobby School of Public Affairs at the University of Houston and a professor of political science.

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