A Jobs Compact for America’s Future

Comments Off on A Jobs Compact for America’s Future
A Jobs Compact for America’s Future LoadingADD TO FAVORITES
Without a well-trained, well-paid, continuously improving workforce, the United States cannot compete with other nations effectively — and won’t be able to sustain high and rising living standards.  Yet at all levels of the economy, people behave as if they don’t believe that.  Consider these facts:
  • Firms value short-term profits over investment in workers.
  • Federal policy makers fail to address high, persistent unemployment and underemployment.
  • Most people’s wages have stagnated for three decades, despite gains in productivity.
These realities seem to defy logic, yet we allow this human capital paradox to persist.  The result, as MIT Sloan School of Management professor Thomas A. Kochan writes in “A Jobs Compact for America’s Future,” in the March 2012 Harvard Business Review, is a true national emergency. The reality is that the U.S. is stuck in the worst economic, political, and social crisis since the Great Depression.  The labor market is failing to generate enough good jobs to support sustainable growth.  If we do not pursue a more comprehensive, aggressive strategy, our standard of living will decline for generations to come.  But this downward slide is not inevitable.  We can reverse the trend by identifying the roots of the crisis and focusing together on our national interests. At one level, the causes of the problem are complex, so there will be no silver-bullet solution.  At another level, what we’re confronting is a simple market failure — and a not-so-simple institutional one. Let’s start with the market failure, which comes down to this:  What’s good for individual U.S. companies is no longer automatically good for business nationwide, for U.S. workers, or for the economy. For individual firms, it often makes economic sense to close a U.S. plant, to send production jobs wherever they can be performed at the lowest cost, and to minimize labor expenses through other means.  But the overall needs of the U.S. business community are much better aligned with those of the U.S. economy as a whole. Despite globalization, U.S. multinational corporations continue to derive 60 percent of their revenues from the U.S. market, according to...

To continue reading, become a paid subscriber for full access.
Already a Business Briefings subscriber? Login for full access now.

Subscribe for as low as $135/year

  • Get 12 months of Business Briefings that will impact your business and your life
  • Gain access to the entire Business Briefings Research Library
  • Optional Business Briefings monthly CDs in addition to your On-Line access
  • If you do not like what you see, you can cancel anytime and receive a 100% pro-rata refund