Job Creation - Scott Adams' Blog

Job Creation

I heard a pundit say the unemployment rate in the United States for so-called educated people is about 4% while the rate for the entire country is above 9%. Education matters. That’s my first data point for this post.

I’ve been in several conversations lately in which people talked about how hard it is to get a service person to show up, or even return phone calls. Some small businesses have more work than they can handle. That’s my second data point.

I know two unemployed people who are in career-specific training programs that virtually guarantee they will get jobs when they graduate because their specific skills will be in demand. That’s my third data point.

I knew several small business owners who can’t expand because it’s hard to find employees that are both trainable and dependable. That’s my fourth data point.

The same pundit I mentioned in the first paragraph (I can’t remember who it was) said we have an “education problem” not a “jobs problem.” That sounds almost right. I would tweak that idea to say we have a “training cost problem,” not a “jobs problem.” It seems to me that almost anyone who doesn’t have a job, and wants one, would be willing to take career training if it were free and local and likely to pay off.

But if all training were magically free and universally available, it wouldn’t help the overall economy. If you double the number of hairdressers or plumber overnight, while the demand remains constant, the people who already have those jobs will see their incomes halved. So the trick is to match the training to the types of jobs that have growing demand.

My stimulus idea for you to eviscerate in the comment section is to offer full government scholarships to train the unemployed for any profession that has growing demand. And if it is necessary to relocate people to where the training is, the country conveniently has plenty of bank-foreclosed properties that can be rented as dorms.

I think we all share a common skepticism for large, wasteful government programs. So let’s imagine that this program is designed to be self-funding. Suppose graduates of the program are taxed a bit extra for several years after they take jobs in the areas for which they trained. If you combine that extra tax revenue with the government savings and increased income from reducing unemployment, I’m betting the government could come out ahead.

I think we all prefer free market solutions over government programs. But realistically, small businesses aren’t going to create training programs for the few employees that each one needs, and small businesses are the economic engine of most communities. And if you want to become self-employed, no one in the private sector has any incentive to train you. Nor can we expect private enterprise to build for-profit vocational training for people who have no money to pay for the service. Only the government has the ability to train the unemployed and recoup the cost after the fact.

As with most of my ideas, this one totally blows. The most obvious problem is that large government programs have a poor track record. But if you’re looking for someone to help you find a lost nut, and the only volunteer is a blind squirrel, that’s still your best option.

One of the more popular ideas for stimulating the economy and reducing unemployment involves funding large infrastructure projects. But I worry that there aren’t enough people with the right training to step into those positions in the near term to call the idea a true stimulus. It won’t help the economy if we create jobs for which the unemployed are not qualified.

You’d be correct to hate my idea of government scholarships for career training. But I’ll defend my view that we can best solve unemployment by seeing it as a training cost issue and an information issue, i.e. knowing which skills are in demand.