Not to Belabor, but the Issue Is Labor

09/02/2008 12:00 am EST

Focus: MARKETS

Terry Savage

Author, The Savage Truth on Money

As we celebrate the Labor Day holiday and the traditional end of summer, this year there’s lots of talk about jobs, jobs, jobs—the number of jobs, the kinds of jobs, and the right policies for creation of jobs.

It seems not enough people in America can find the kind of rewarding (personally and financially) work they seek—if they can find a job at all. Our unemployment rate currently stands at 5.7%—far from the bread lines of the Depression, or even the double- digit rates of the early 1980s, when much of our industrial economy went through an upheaval.  (We’ll get an update on those unemployment numbers Friday.)

That 5.7% unemployment rate in this huge economy represents 8.8 million people who say they are looking for work but can’t find a job. That doesn’t include the millions who have given up the job search, an estimated 1.6 million “discouraged workers.”

Nor does it include the “underemployed,” those working in part-time positions because they cannot find full-time jobs or because their hours were cut back. In July, according to the Bureau of Labor Statistics, the number of people who worked part time for economic reasons rose by 308,000, to 5.7 million.

All those economic statistics mean little, of course, if it is you or someone in your family who can’t find a job, or is working fewer hours for lower pay just to pay the mortgage or put food on the table and gas in the car.

Research shows small businesses created more net new jobs than larger companies in recent years. So, if you start your own small business and grow wealth—or hire other people to work for you, or purchase supplies from a small business—you’re boosting the economy. 

But many of those small businesses can’t afford the health or retirement benefits provided by larger firms—and even the biggest companies have cut back in that area dramatically. Individual retirement accounts have taken up some of the burden that was once provided by corporate pensions. But it is the employer-linked health care model, which worked so well in a different era, that must now be replaced.

The issue facing Americans—and the political candidates in this election season—is how to recognize the changing profile of labor in this country. The challenge is how to provide benefits and incentives that keep the economy and the job market growing but don’t make America noncompetitive in a truly global marketplace. 

The candidates are making big promises, but can they deliver economic and job growth?

If you were in charge, what policies would you enact to create jobs, and stimulate economic growth and prosperity? You can start the conversation by posting your comments here.

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