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How to Create <i>Good</i> Jobs

The default strategy for many government officials isn’t working. Better policies could accomplish a lot.

factory worker
In this Monday, May 1, 2017, photo, a worker takes part in the manufacturing of hats the Bollman Hat Company in Adamstown, Pa. As another Fed rate hike nears, U.S. and global economies look healthier, but they still aren’t as strong as they were a decade earlier. In the United States, factories have expanded nine straight months, bouncing back from a 2015-2016 slump caused by cutbacks in the energy industry and by a strong dollar that makes American-made products costlier overseas.
(AP Photo/Matt Rourke)
In his 2011 book The Coming Jobs War, Gallup Chairman Jim Clifton writes that after years of research, his firm had concluded that “what the whole world wants is a good job.” That may not seem like much of a revelation, but Clifton’s emphasis is on the word “good” -- not the “gig economy,” but stable, regular, well-paid employment. The fact that the demand for good jobs far exceeds the supply is a real threat to political stability, Clifton writes, because “whether or not you have a good job defines your relationship with your city, your country and the whole world around you.”

Indeed, there aren’t enough good jobs -- even though we see plenty of work that needs to be done: infrastructure to be repaired or replaced, affordable housing to be built, and children, the sick and the elderly to be cared for. We frequently hear that jobs are disappearing due to globalization and automation. But their impact on jobs is probably minimal. Trade and technology could create as many good jobs as they destroy if we had the right policies in place, particularly those that impact women, immigrants and small businesses.

A report by McKinsey Global International last year estimated that by realizing the full potential of women in the workforce, every state and local government could add at least 5 percent to its economic output and half of the states could increase their GDPs by 10 percent. Policies that result in the increased availability of paid maternity leave, affordable child care and flexible work schedules would lead to significant increases in women’s workforce participation.

We also need to make it easier for people to immigrate to the United States and provide a swift, rational path for them to become citizens. Clifton notes that a great deal of the internet technology boom can be traced back to just a thousand people, of whom more than half were immigrants. “America can’t win the coming jobs war,” Clifton writes, “without attracting the best talent and helping the talented become American citizens fast.”

And we need to make it easier for small businesses to compete by returning to the regulatory policies that, until the early 1980s, limited corporations’ market concentration through mergers and acquisitions. Mergers drive declining rates of entrepreneurship. From 1977 to 2013, the number of startups as a share of all firms fell from 16.5 percent to 8 percent, and their share of jobs declined from 5.7 percent to 2 percent.

“Sustainable job creation,” Clifton writes, “can’t be bought.” Yet, despite an ever-growing pile of evidence that chasing jobs with tax incentives and relaxed regulations doesn’t work, that’s still the default strategy for many state and local government leaders. It might create a few jobs, but rarely good ones. The communities whose leaders figure this out first are going to be the ones that win the jobs war. 

Mark Funkhouser, a former publisher of Governing and former mayor of Kansas City, is president of Funkhouse & Associates, an independent consulting firm. He can be reached at mark@mayorfunk.com.
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