How to Create 10 Million High-Paying Jobs
October 6, 2014 --
The United States has entered its 64th month of recovery from the trough of the Great Recession. That is good news. From the labor-market bottom, companies in America have created about 10 million new jobs; these have contributed to unemployment falling to just 5.9 percent, per the latest Employment Situation report released Friday. That is also good news. All is most definitely not well, however. As we discussed in our missive last week, the Census Bureau recently reported that 2013 median household income of $51,939 remained fully 8.0 percent below its pre-recession level.
America’s central policy challenge is not just creating jobs. It is creating good-paying jobs. Last week one of us (Matt S.) had a new report published that explains why high-wage jobs are often those connected to the world through international trade and investment. This report also explains how a bold set of pro-trade policies could create 10 million new high-paying trade-connected jobs in America over the next decade.
Because trade encompasses a dynamic mix of products, customers, and production methods, America needs a similarly dynamic policy agenda to create more good jobs connected to trade. To open new markets and extend supply chains, it should liberalize trade and investment through creative initiatives like the Trans-Pacific Partnership and the Trans-Atlantic Trade and Investment Partnership. To broaden business ties abroad, it should expand and streamline high-skilled immigration. To attract and retain more global companies, it should reduce and simplify America’s high-rate, high-complexity business-tax code. To provide more workers with the skills and opportunities to participate in and benefit from trade, it should strengthen America’s safety net.
What would such a bold set of policies deliver? Of the roughly 10 million new jobs created by companies since America’s employment nadir in early 2010, only about one-third were in tradable industries. Not many tradable-industry jobs were created because there was almost no new policy support for them. An aggressive pro-trade policy agenda would accelerate overall economic growth—and so job creation. This agenda would also tilt that faster job creation toward globally-engaged jobs. Thus over the next decade could America create about 10 million new high-paying, trade-connected jobs.
Matt S.’s new research report, “How America is Made for Trade,” can be found here. You can also read here (with subscription access) his op-ed column in The Wall Street Journal last week discussing the report.