Professor Mark J. Perry’s Blog for Economics and Finance
While the overall economy struggles to create jobs during another “jobless recovery,” it’s been a much rosier employment picture in one of America’s most successful “shovel-ready” job-creating industries: Oil and Gas Extraction.
The chart above displays the monthly percentage changes in employment levels since January 2007 for oil and gas extraction jobs compared to total nonfarm payroll jobs. As of January 2012, payroll employment is 3.3%, and 4.7 million jobs, below the month of January five years ago. In contrast, the explosion of new oil and gas jobs has increased employment in that industry by about 1/3 since January 2007. Over the last 12 months, oil and gas companies have added 23,200 new workers, at a rate of almost 100 new hires every business day.
By JOSHUA SEGALL
The question looming in everyone’s mind is, “Where are the jobs?” The answer to this question appears to be China. Last week, President Barack Obama’s jobs czar, CEO and Chairman of General Electric, Jeffrey Immelt, announced that he was launching a joint venture between GE and China. This partnership will send medical and aviation manufacturing jobs to China, rather than keep them here in the United States. This further adds to the poor choices Obama and his administration have made when “attempting” to reduce the unemployment rate.
When Obama took office in 2008, he ran on the idea of change. With an economy in the slums and a global recession on the brink, Obama was voted in to transform the way the United States operates. Shortly after he was elected, he went on the record to state that “we need to act with the urgency this moment demands to save or create at least 2.5 million jobs so that the nearly 2 million Americans who’ve lost them know that they have a future.” At the time the unemployment rate was at 5.8 percent.
Now we are well into 2011, and the unemployment rate is 9.1 percent. The economy is still failing and jobs haven’t been created. Many people immediately turn the blame over to President George W. Bush. The truth is that the unemployment rate only rose from 4.7 percent in 2001 to 5.8 percent in 2008. That’s a total of only 1.1 percent. Obama is not even a full three quarters of the way into his first term, yet the unemployment rate has gone up 3.3 percent.
The unemployment rate only accounts for people who have actively sought work within a prior four-week period. People who are unemployed but do not actively seek employment are known as discouraged workers. This group of people, believed to be more than one million, do not factor into the unemployment rate.
To further add to our problems, Obama does not have a solution. In 2009, as part of his American Reinvestment and Recovery Act, he announced his new energy team and boasted about “shovel-ready projects all across the country.” He repeatedly made mention of the term “shovel-ready” and claimed to have met with governors that all had projects that were ready to break ground. In 2011, when asked about these “shovel-ready” jobs, Obama laughed and said “shovel-ready was not as shovel-ready as we expected.”
One of the biggest issues with job creation today is the regulations imposed on employers. Since the Obama administration has taken office, employers now have to be compliant with a number of different regulations that include the new healthcare laws and newer Environmental Protection Agency restrictions. Everyone from the family farmer to the small business to the large corporation is being hindered by these regulations. As a result, companies are fearful of hiring because of the uncertain future and the impact on their businesses.
The best thing that Obama and his administration could do today is listen to the companies that do the hiring. There are a number of plans that have been introduced by members of Congress, such as Sen. Ron Johnson (R-Wisc.) who presented a bill declaring a moratorium on major regulations until unemployment drops below 7.7 percent.
The only way to get the job market growing again is to encourage businesses to hire. Offering incentives to businesses is key to promoting job growth. While the president might think he offered hiring incentives, American companies are proving him wrong. It is time for Obama to honor the promises he made and get more Americans back to work.
— Joshua Segall is a management information systems senior. He can be reached at firstname.lastname@example.org.