While the economic recovery in the United States has been impressive (obvious from most economic indicators), there is one area that is among the most important, but has shown no major improvement: new jobs created. According to latest statistics, only 2.2 million new jobs were created in 2004, the best showing in five years but much lower than a previous administration forecast of 3.6 million new jobs. According to Challenger, Gray & Christmas, last year American companies cut as many as one million jobs, either to stay competitive or because they jobs were offshored. We have done everything in our arsenal (including massive tax cuts that have fundamentally damaged the American economy and will it continue to hurt its competitiveness for years to come) but job growth remains, at best, anemic. (Related article: Structural changes in American job market impede new job creation)
Reasons why job growth is not likely to improve
The kind of job growth that we saw in the 90s may not happen any time soon simply because during last 5 years we have seen a strategic shift in the global economy. The technological improvements that we made in the 90s not only allow us to have workers wherever we can find them cheaper, but even within the United States, we can have more independent consultants (including management consultants like me) and contractors who can be employed on an as-needed basis. In other words, if you have a broadband connection and a phone, you can work for almost anyone without any geographic restrictions.
New business opportunities (and correspondingly, new jobs) are created when there is a major technological or demographic shift. We saw that in the 90s with major advancements made in many areas of technology: IT, networking, Internet, e-business, etc. I am somewhat excited by robotics and biotech/drugs but I am not sure if even explosive growths in both these sectors will create a very high number of jobs in the coming years.
Having said that, a few areas that will definitely create jobs in the United States are: personal care/wellness (trend to look younger in an aging society), services for the elderly, digital lifestyle (software/hardware/services/ content), and healthcare (~45 million Americans have no health insurance and someone will eventually figure out how to serve them).
I also don't buy the argument that retraining of Americans will somehow create jobs for them. Indeed companies are looking for people with very specific needs, but we also have to realize that when radiologists and computer scientists lose their jobs to someone overseas, it is hard to apply the logic of retraining. That was an old concept and applies only to jobs in the manufacturing sector.
How can Americans find work?
Let us accept the reality that the jobs are not going to be created in the United States. No amount of hope and promises from politicians will make that happen. If it does happen it will be only because of market forces. So stop waiting for market forces to act and go where the market forces are already in our favor.
The rest of the world lacks things that we don't even realize we have; we take them for granted. Clean water is one example, and the list is very long. Eventually, the the rest of the world will be able to afford things that we don't even care about any more (e.g. broadband connections, wireless networking, etc.) the way they can now afford mobile phones. Helping the rest of the world is a business opportunity by itself.
In other words, Americans may not find jobs the way they have traditionally found them. Americans will have to create their own new jobs and these could be in the form of working for an overseas company, or becoming an entrepreneur serving people in emerging markets like Brazil, Russia, India, and China (BRIC). This could very well mean moving overseas and stop believing, as we have always done, that the center of the world is here.
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