By Siobhan Dowling, GlobalPost
BERLIN, Germany – Unemployment is rising in most European Union countries, as the effects of crippling sovereign debt crisis, and the austerity measures prescribed to tackle it, take their toll.
Yet the bloc's biggest and richest member has seemed almost immune to the effects of the crisis, particularly when it comes to its labor market. While dole queues lengthen in Spain, France and Greece, in Germany they are rapidly dwindling.
In fact Germany has seen the number out of work decrease to its lowest level since 1991. It's a remarkable turnaround. FULL POST
Harvard Business School alumni offer up ideas in a new report based on nearly 10,000 responses to a survey of 50,000 HBS grads. The report’s authors, "project directors Michael E. Porter, Lawrence University Professor and a leader in the field of corporate strategy, and Jan W. Rivkin, Rauner professor of business administration," write that business and government have important roles to play in keeping jobs in America:
"America’s political system, especially at the federal level, is letting us down, in ways that cut across political parties and span Presidential administrations and Congressional sessions. But it would be wrong to place either the U.S. competitiveness problem or its solution at the feet of the government. Business plays a role in creating even those problems that seem to stem from public policy. Take, for instance, America’s corporate tax code. The code is convoluted in part because government authorities have allowed it to be, but also because corporate leaders have relentlessly pushed for loopholes and subsidies that serve narrow self-interest. Part of the business agenda for U.S. competitiveness is to stop taking actions that benefit one’s own firm but, collectively, weaken America’s business environment." FULL POST
Harvard Business School alumni offer up rationales in a new report based on nearly 10,000 responses to a survey of 50,000 HBS grads. Note, in particular, a third of respondents cite the need for skilled labor as driving their outsourcing decision.
According to the report:
"During the past year, more than 1,700 respondents were personally involved in decisions about whether to place business activities and jobs in the U.S. or elsewhere. In these choices, the United States competed with virtually the entire world and fared poorly, losing two-thirds of the decisions that were resolved. Facilities involving large numbers of jobs, high-end work, and groups of activities located together moved out of the U.S. much faster than they moved in."
The study found:
"Of the 1,005 location decisions about potentially moving out of the U.S., the most common alternatives considered were China (42 percent), India (38 percent), Brazil (15 percent), Mexico (15 percent), and Singapore (12 percent)."
So what can be done? The authors have some ideas here.
Apple employs 43,000 people in the United States and 20,000 overseas, a small fraction of the over 400,000 American workers at General Motors in the 1950s, or the hundreds of thousands at General Electric in the 1980s. Many more people work for Apple’s contractors: an additional 700,000 people engineer, build and assemble iPads, iPhones and Apple’s other products. But almost none of them work in the United States. Instead, they work for foreign companies in Asia, Europe and elsewhere, at factories that almost all electronics designers rely upon to build their wares.
“Apple’s an example of why it’s so hard to create middle-class jobs in the U.S. now,” said Jared Bernstein, who until last year was an economic adviser to the White House.
“If it’s the pinnacle of capitalism, we should be worried.” FULL POST
Editor's Note: Sarah O. Ladislaw is a senior fellow with the Energy and National Security Program at the Center for Strategic and International Studies in Washington, D.C.
On Wednesday, the Obama administration officially denied the TransCanada application for a Presidential Permit for a 1,700-mile-long pipeline, known as Keystone XL, which would bring approximately 800,000 barrels of oil per day from the Canadian oil sands to the U.S. Gulf Coast.
The White House and Department of State press releases and statements make it clear that from their vantage point the decision to deny the permit was not based on the merits of the project but was forced on them by “the rushed and arbitrary deadline insisted on by Congressional Republicans,” which “prevented a full assessment of the pipeline’s impact, especially the health and safety of the American people, as well as our environment.” Proponents of the project reject this line of reasoning citing the nearly three years of investigation into the environmental and economic consequences of the pipeline that preceded this decision. FULL POST
Editor's Note: Be sure to catch GPS every Sunday at 10a.m. and 1p.m. EST. If you miss it, you can buy episodes on iTunes.
By Fareed Zakaria, CNN
It looks like former Massachusetts Gov. Mitt Romney will win his party's nomination. So Republicans are following a familiar pattern: They are nominating the mainstream candidate who has waited his turn. The guy who ran once before. This is the party, after all, that had a Bush or a Dole on its ticket for about 20 years. It's also a party that nominated Richard Nixon on its presidential ticket 5 times. Republicans don't like surprises.
But there is something surprising about this primary. It's the charges that are working against Romney. Romney's opponents have tried to change his upward trend at two levels. First, they called him a "Massachusetts moderate" - but that didn't seem to work. People perhaps think that Romney is more electable in the general elections because he's more moderate than his opponents.
But a second line of attack does seem to be gaining traction - that of Romney as job-killer or Romney as the private equity guy, who buys companies, hollows them out and then outsources jobs.
Now it's striking that this attack is coming in a Republican presidential primary. After all, what Romney did while at Bain Capital was classic capitalist "creative destruction." He took over businesses and tried to make them more productive. To do so, he often had to shed jobs. In other companies - startups like Staples - he created jobs. FULL POST
Princeton professor Anne-Marie Slaughter writes on the Harvard Business School blog:
"The functions of partnering, brokering, aggregating, curating etc. all point to another dimension of global empowerment. For decades the name of the game in policy-making and problem-solving was to launch a new program or initiative — to do something that needed doing. Today the best advice is likely to don't just do something, stand there. Stand there, look around, find out what is already being done, and then connect existing initiatives, programs, projects, and organizations to one another in ways that allow them to be more than the sum of their parts."
"So what does all this mean for job-seekers in this uncertain economy? Forget the titles on the org charts and the advertised positions. Design your own profession and convince employers that you are exactly what they need. In my view, the New York Times and other information hubs ought to be advertising for curators and verifiers, but you shouldn't wait for them to do so. Define the functions you think they need and you can supply, and then apply for a corresponding position, whether or not they've created it yet."
Editor's Note:Bruce Katz is the vice president and founding director of the Metropolitan Policy Program at the Brookings Institution (follow him on Twitter @bruce_katz). Judith Rodin is the president of the Rockefeller Foundation (follow them on Twitter @foundationrock.) Who do you think is an economic innovator? Join the conversation on Twitter #pragcaucus. The views expressed in this article are solely those of Bruce Katz and Judith Rodin.
By Bruce Katz and Judith Rodin - Special to CNN
With federal politics mired in gridlock and the economy stuck in neutral, Americans are hungry for new ways to drive economic growth, foster job creation, and restore prosperity. As Parag Khanna and David Skilling so aptly noted in their recent essay, “Big Ideas from Small Places,” these new approaches are most likely to emerge from “small countries, city-states, [and] city-regions” – places where innovation is the only option, where cooperation and collaboration rule the day.
Something similar is taking place in the United States, not at the national level, but in many of our states, cities and metropolitan areas. Cities and metros tend to concentrate creativity and innovation, two of our nation’s most important resources. It’s in these “small places” that 84% of Americans live and 91% of U.S. GDP is generated. It’s here that we see people taking on the tough challenges, finding new solutions to the seemingly intractable problems wrought by the sluggish economy. And it’s here that a pragmatic caucus of political, business, university and civic leaders is emerging to make the big plays necessary to grow jobs in the near term and retool metropolitan economies for the decades ahead.
Editor's Note: Gary Hufbauer is Reginald Jones Senior Fellow at the Peterson Institute for International Economics. Martin Vieiro is a research analyst at the Peterson Institute. The views expressed in this article are solely those of the authors.
By Gary Hufbauer and Martin Vieiro, Foreign Affairs
Even though the Occupy Wall Street protests seem incoherent at times, one main theme is clear: anger at big business. On this count, the occupiers are aligned not only with Hollywood portrayals (predating even the 1941 classic Citizen Kane) but also with mainstream Americans. A majority of respondents to a recent Gallup survey said that they believe big business has too much power. The sentiment held across party lines. The reasons seem simple enough. Business leaders often rank in the top one percent of income earners. Meanwhile, unemployment remains over nine percent - and is much higher among minorities and young people - yet corporations are sitting on trillions of dollars in unspent cash.
But this backlash is based on three common misconceptions about major U.S. corporations. The first is that Wall Street and big business are the same thing. When asked separately about "major corporations" and "financial institutions," the same percentage of Americans, 67 percent, agreed that each cluster had too much power. Discontent with Wall Street is understandable. Its practices led to wild lending and the sale of trillions of dollars' worth of toxic assets to unsuspecting investors. When the house of cards crumbled in 2008, the George W. Bush administration was forced to bail out Wall Street. FULL POST
A GPS reader named Joseph left the following, thoughtful comment on the post, U.S. economy recovered from recession but jobs lag far behind. He was responding to the question: Given that economic output has returned to pre-2008-crisis levels, why haven't jobs done the same?
"Joblessness recoveries correspond to the "unbalancing of our economy". We now have a service economy that in some cases barely provides a living wage. This was camouflaged a huge trade-gap financed by our borrowing as a nation and the long-lasting housing bubble. The truth is we don't make very much any more. American "industrial production" has fallen off a cliff. We have transferred our technology and jobs for decades. Even "Apple" the largest company by market capitalization in America s not made here." FULL POST
Editor’s Note: Rob Atkinson is president of the Information Technology and Innovation Foundation, an economic and technology policy think tank based in Washington.
By Robert D. Atkinson – Special to CNN
Too many American policy elites - pundits, economists and policymakers – tragically accept the ongoing catastrophic decline of American manufacturing as inevitable. As some 5.5 million jobs and 54,000 factories have disappeared over the last decade, many U.S. elites have noted that intense competition from low-wage countries has caused other industrialized countries to experience similar declines. This view is wrong.
In fact, the United States’ precipitous drop in manufacturing is actually atypical. Indeed, the manufacturing employment, output and market share of many other comparable countries has actually been stable in recent years. Between 1997 and 2010, U.S. manufacturing job growth was the worst among a group of ten OECD countries while Germany’s was the best. FULL POST
By Fareed Zakaria
Herman Cain’s campaign promise - the “9-9-9” tax-reform plan - has invited universal scorn from pundits in a way I have rarely seen. “Dial 9-9-9 for Nonsense,” sniffed the Economist. “Ill-considered, hand-waving improvisation,” said the conservative National Review. But Cain’s idea has caught the public’s attention, and for good reason.
I am going to defend not Cain’s specific policy proposals but their general thrust. His plan is sloppy and, in parts, bizarre. But the impetus behind it - tax simplification and reform - is not. The first 9 is a 9% income tax to replace the current tax code. Most Americans believe that the federal tax code is highly complex and fundamentally corrupt. They are right. The federal code (plus IRS rulings) is now 72,536 pages in total. The code itself is 16,000 pages. The statist French have a tax code of 1,909 pages, only 12% as long as ours. Countries like Russia, the Czech Republic and Estonia have innovated and moved to a flat tax, with considerable success.