10 Paths Congress Can Take to Job Creation

BOSTON (TheStreet) -- Grappling with unbudging unemployment rates, is there anything either Congress or the Obama administration can do to put people back to work?

While critics continue to debate the effectiveness, or lack thereof, of economic stimulus spending, a team of researchers at The University of California at San Diego has a few suggestions they say could put people back to work, and with better jobs to boot.

A study by faculty at the University of California at San Diego has become the book Closing America's Job Gap.

A study by UC San Diego faculty -- Mary Walshok, Tapan Munroe and Henry DeVries -- has been expanded into the book Closing America's Job Gap (W Business Books, January 2011).

DeVries says their research yielded some surprising findings.

"There is something different happening than we thought," he says. "What was happening is that the jobs that have gone away are not coming back and small businesses are not going to bring the jobs back."

The problem, as he sees it, is that "there is a job gap, in that people who are thrown out of industries like construction and retail and finance don't have the skills for where jobs are being created through innovation, such as in green jobs and information technology."

There are still jobs to be had, in his thesis. There just aren't the properly skilled employees to fill them.

DeVries uses welders as an example. In talking to companies and industry groups alike, he and his cohorts estimate that there are upward of 100,000 welding jobs going unfilled because expertise is lacking on new materials and technologies.

"There are, right now, 3 million jobs that, despite high unemployment, employers cannot fill because they cannot find American workers with the skills to fill those jobs," he claims. "That's more job openings than the population of Iowa."

The need for a better- and continually trained work force is among the reasons stimulus spending may have missed the mark.

"We looked at the stimulus money that was being spent and found that out of the $2 billion of federal money that was going to the new energy projects, eight out of 10 of those dollars were winding up in the pockets of foreign companies because they couldn't find the American workers with the skills they needed."

He cites wind turbines as a green technology that falls into this category.

"Countries like Denmark and Germany were investing in their work force to have them trained for these needs and jobs," he says. "That's who American companies had to partner with to make it happen. We are either going to have to export the jobs or import labor."

Federal support for training initiatives, and incentives for companies to offer them, is crucial, DeVries says.

"Unless we fully commit to retraining our country then our businesses do not have much of a future," he says. "People have to understand that this is not their grandfather's high school- or college-based economy. There is a growing disconnect between the types of jobs that employers need to fill and the number of Americans with the right education and training. The only thing constant is change. The economy is going to keep changing, and people are going to need to keep adapting."

DeVries' book breaks down 10 ways politicians in Washington can mobilize various interests to chip away at what is nearly double-digit unemployment:

Encourage start-ups
Congress should support innovative start-up companies that create jobs and provide incentives for retraining people to be qualified for new technologies.

Bottom up, not top down
Rather than federal top-down strategies for job creation, the authors promote a bottom-up approach. The government should invest regionally in the kinds of collaborations "that are already producing good jobs in high tech, biotech and clean tech, for which specialized training may be needed."

Invest in the skilled trades
The U.S. is not investing as much money and time in technical skills development as other nations, the book claims. Shortages of skilled workers -- electricians, carpenters, plumbers and welders -- are acute in many of the world's biggest economies, including the United States and Canada, where employers ranked skilled trades as their No. 1 or No. 2 hiring challenge, according to the Manpower ( MAN) agency's 2010 Talent Shortage Survey.

Time for an upgrade
Congress can help American employers invest in upgrading their workers' skills at the levels most European and Asian employers do. U.S. companies have fallen to eighth place for investments in training and employee development, as ranked by the World Economic Forum, according to the authors.

Tax incentives for training and tuition assistance programs
Investment in employee training is rising, but could use a boost, the study concludes. Employers recognize that they need a highly skilled work force to remain competitive, and the government should provide incentives to make that happen.

Tax incentives for time off for continuing education
A roadblock to "re-skilling" is that many employees find it difficult to pursue continuing education while balancing work and family obligations. "Employers should offer flexible, convenient educational options to help increase participation," the writers suggest. "Tax incentives for doing so would go a long way."

Support regional business clusters
Regions should be thinking about industry clusters that can "harness their assets to grow innovative new enterprises." Taking the cue, 26 of 31 European Union countries have cluster initiative programs, as do Japan and Korea, but "the U.S. needs cluster strategies that include provisions for work force development."

"There are certain regions that in history have naturally attracted businesses. Birds of a feather have flocked together," DeVries says. "Think Hollywood and the film industry, Ohio and the tire industry, Detroit and the automobile industry. In San Diego it is the life science industry. Those things have naturally occurred over the years, but we can, and need, to do more to encourage them."

Assemble the right team
Federal programs should maximize the resources provided for regional collaboration, bringing together the four key players in economic growth: the research community; entrepreneurs and investors; economic development associations; and educators and work force training organizations.

Help adults, not just kids
Congress should include adult learners in their education plans, not just undergraduates and graduate students. "Many members of Congress believe that an undergraduate or advanced degree will provide the knowledge and skills sufficient for a professional career spanning several decades," the authors say. "In today's world that is no longer true. Expanding on-the-job training and lifelong learning options are critical."

Think globally
Congress can stimulate training programs to give American workers a clear sense of the effects globalization and new technology have on all industries and what they must do to be competitive.

-- Written by Joe Mont in Boston.

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