Though Obama cited recent improvements in the job market — the country has regained more than 3 million jobs in the past 22 months — it’s also clear that we still have a way to go. After all, 3 million jobs in 22 months comes out to roughly 136,000 jobs per month. Economists believe it will take the addition of at least 250,000 jobs per month to begin bringing unemployment back to pre-recession levels.
Luckily, the president announced a number of measures that, if carried out as planned, will both create jobs and retrain workers for the jobs that are available now. Here is a recap of the employment-related actions announced in the speech, and why they’re important to American workers.
1. The goal: Return outsourced jobs to the U.S.
The president said: “Tonight, my message to business leaders is simple: Ask yourselves what you can do to bring jobs back to your country, and your country will do everything we can to help you succeed … Right now, companies get tax breaks for moving jobs and profits overseas. Meanwhile, companies that choose to stay in America get hit with one of the highest tax rates in the world. It makes no sense, and everyone knows it … My message is simple. It’s time to stop rewarding businesses that ship jobs overseas, and start rewarding companies that create jobs right here in America.”
Why it’s important: In April 2011, the Wall Street Journal researched the outsourcing practices of some of the top corporations in the U.S., and found that while the companies had cut more than 2.9 million jobs stateside since 2000, they’d added 2.4 million jobs overseas in the same time period.
2. The goal: Retrain American workers for in-demand jobs.
The president said: “[I hear] from many business leaders who want to hire in the United States but can’t find workers with the right skills. Growing industries in science and technology have twice as many openings as we have workers who can do the job. Think about that — openings at a time when millions of Americans are looking for work. Join me in a national commitment to train 2 million Americans with skills that will lead directly to a job … You need to give more community colleges the resources they need to become community career centers — places that teach people skills that local businesses are looking for right now, from data management to high-tech manufacturing.”
Why it’s important: According to CareerBuilder’s 2012 hiring forecast, which was based on a survey of more than 3,000 hiring managers, 26 percent of employers reported that they had job openings for which they could not find qualified workers. The areas they had the most trouble filling? High-skills jobs like information technology and engineering. Retraining job seekers for the positions that employers need to fill is the surest way to close the skills gap and make a dent in the unemployment rate.
3. The goal: Encourage small business growth.
The president said: “Innovation is what America has always been about. Most new jobs are created in startups and small businesses. So let’s pass an agenda that helps them succeed. Tear down regulations that prevent aspiring entrepreneurs from getting the financing to grow. Expand tax relief to small businesses that are raising wages and creating good jobs.”
Why it’s important: As Obama pointed out, most jobs are created by small businesses. According to the Small Business Administration, “Small firms accounted for 65 percent (or 9.8 million) of the 15 million net new jobs created between 1993 and 2009.” It’s imperative for the job market, then, that small businesses have access to the resources they need to expand and feel secure enough to do so.
Although it remains to be seen how well, and how quickly, these plans will take form, we think it’s reassuring to hear the administration seems to be on a logical and sustainable path toward lowering the unemployment rate. What do you think?