Jobs are on the way!

Jobs are on the way!

Jobs are on the way!

Commentary about business and finance.
Dec. 14 2009 9:42 AM

Jobs Are on the Way!

The pessimists are wrong.

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Instead of one big thing, it's likely that job growth will be fueled by several smaller things. Government spending will be one of them. The Census Bureau is hiring 1.2 million people in preparation for the 2010 census. The big rap on the stimulus—it wouldn't happen fast enough—may turn out to be one of its virtues. Since it was passed in February 2009, only $237.6 billion (30 percent) of the $787 billion package has entered the economy. The tax cuts and infrastructure spending in the pipeline for 2010 and 2011 will support job creation. On Dec. 9, New Jersey Transit approved a $583 million contract for two construction firms to get cracking on a new commuter rail tunnel connecting New York and New Jersey under the Hudson River. It will create at least 1,000 jobs starting next year.

A growing global economy and the weak dollar point to a second source of support for job growth: exports. Exports fell from $164 billion in July 2008 to $122 billion in April 2009, but they've risen in every month since then, to $137 billion in October. On Dec. 4, Korean Air announced an order for five Boeing 747-8 Intercontinental jetliners for a total of $1.5 billion. *

And there's more help to come from the government. On Dec. 9, Obama unveiled a set of proposals for a second stimulus targeted specifically at job creation, including a cash-for-clunkers program, and tax credits for businesses that hire. The latest proposals were greeted with bipartisan skepticism. Too little, says the left. "My big complaint is that he's not grasped the severity of the situation yet," said Dean Baker, director of the liberal Center for Economics and Policy Research. Baker points to a work-sharing proposal he drafted in which companies are given incentives to hire more people. The right, meanwhile, says Obama's newest programs are poorly designed and misguided. "His plans are very much steeped in Keynesian economic policy, stimulated by the government," House Minority Whip Eric Cantor said last week. At an occasionally contentious meeting in the White House on Wednesday, Cantor and his colleagues presented President Obama with their "no-cost jobs plan." The proposals—halting regulations that would have an economic cost, eliminating impending federal tax increases, and freezing spending—sound an awful lot like John McCain's 2008 economic platform.

It's not surprising that pessimism surrounding employment endures. After what we've been through, our lack of faith in government and corporate America is understandable. There's not as much to lose by being pessimistic in a good time as there is by being excessively optimistic in a down time. But the doomsayers don't simply err by dismissing mounting evidence and embracing the narrative of decline. They mistakenly assume that companies won't put their cash hoards to work, and that a new set of disruptive, job-creating technologies won't emerge. Five years ago, Google had about 2,300 employees. Today, it has about 20,000. In December 2004, did any seer envision that? Economists can't forecast what will happen in five months, let alone five years.


A version of this article appears in this week's Newsweek. Newsweek'sDaniel Stone contributed to the story.

Correction, Dec. 15, 2009: This article mistakenly stated that the Boeing 747-8s were $1.5 billion each. (Return to the corrected sentence.)