What does that really mean? Do we need to create jobs? What is a job anyway?
A job has traditionally been defined as a relationship between an employer and an employee where the employee is paid for providing a permanent routine service or function; skilled or non-skilled.
We all realize jobs are not created equal. There are low paying jobs like fast food preparation or retail sales. These are valuable as a beginning to the employees work experience. There are higher paying jobs that may also be high-demand jobs such as welders or technology professionals.
Many economists, elected officials and other organizations will make proclamations that we need to create a certain number of jobs for various reasons:
- To keep unemployment low or at a certain rate
- To keep taxes streaming into the government to pay off debt and keep programs functioning
- To keep up with population growth
More often than not, these proclamations do not distinguish between types of jobs. It’s just jobs. But creating any job so you can say you met a target is not accomplishing the real goal.
I’m a big fan of Jon Roberts, Principal and managing director of TIP Strategies in Austin, TX. He makes the argument that not only is the definition of a job changing; the types of jobs and employees are also changing.
Jon wrote a fascinating article for the IEDC Economic Development Journal titled, The Future of Jobs.
He suggests that the new economic model is a question of creating income not jobs.
Everyone looks at the unemployment rate and job participation rate as an indicator of the health of the economy. Roberts shows evidence that the gross domestic product and the labor participation rate do not have much of a relationship with each other.
He also lists employment categories that are not captured in traditional jobs reports:
- The temporary worker – “employees” who do not work for a single employer and who may work through staffing agencies
- The sole proprietor – typically a small business owner
- The family worker – a family member not claimed as an employee
- The freelancer – contractual and work for several different employers
- The pick-up worker – temporary jobs on an as-needed basis
- The informal or shadow economy – grey market (not illegal but outside of normal business practices) and black market (usually illegal)
Then there are discouraged workers who have stopped looking for work. They are not counted in the unemployment statistics.
Technology has been a disruptor. It introduced automation which replaced human beings who did repetitive unskilled work. But as is always the case, technology creates new job demands and problems to solve. There are jobs that require services and craftsmanship that technology cannot provide.
New skills are needed, complex skills are needed and skills needed are constantly changing. Employers are finding that highly skilled workers are no longer permanent but are highly transient. Today’s employees expect to have many jobs. They are looking at a job as a means not an end.
There are also job categories that are reporting huge shortfalls. The Air Force reports an alarming shortage of pilots. Nursing is another area where there is a shortage.
Jobs being eliminated, new jobs skills required for new job categories created and huge shortages in some areas means that many people need to learn new skills.
Education has been and will become even more critical in the changing job market.
Key findings from a Georgetown University Center on Education and the Workforce report (Job Growth and Education Requirements Through 2020) states:
- There will be 55 million job openings in the economy through 2020: 24 million openings from newly created jobs and 31 million openings due to baby boom retirements.
- By educational attainment: 35 percent of the job openings will require at least a bachelor’s degree, 30 percent of the job openings will require some college or an associate’s degree and 36 percent of the job openings will not require education beyond high school.
- STEM, Healthcare Professions, Healthcare Support, and Community Services will be the fastest growing occupations, but also will require high levels of post-secondary education.
- Employers will seek cognitive skills such as communication and analytics from job applicants rather than physical skills traditionally associated with manufacturing.
Jobs are a way of creating value - value to the employee, the employer and the community based on the services and products provided. The income generated by jobs is a path to creating wealth. Wealth is a much broader subject than income; it encompasses much more than money even though money is obviously a hugely important component to the individual and the economy as a whole.
Economic developers have had “job creation” as their mandate. They work to retain businesses, help existing businesses expand and to attract new businesses to the area. Most economic developers focus on the creation of higher paying jobs. Advocating for the most attractive business climate, marketing the community’s strengths, partnering with educational institutions and developing talent attraction strategies are a few of the ways Economic developers work to facilitate job creation. Communities have strengths that lend themselves to certain kinds of products and services; certain categories of industry.
Income and wealth creation through education, encouraging business, matching business attraction to your community’s strengths and matching skills to opportunities is more productive than creating a set number of “jobs.”