Job Creation

Job creation is a very broad term used to describe that way jobs are founded and created. Things are very different today than they were several hundred years ago. Not only is job creation vastly different, but also job titles and descriptions have totally changed. Many jobs that were in existence a century ago are no longer performed today.

One hundred years ago people produced or manufactured items and sold them directly to consumers. The local farmer sold his unprocessed foodstuffs at the market in the nearby village and got paid for his goods. The blacksmith made horseshoes and got paid for them, the tailor sewed clothes and got paid for them, and the doctor got paid directly by his patients.

Today, things are much more complex. Many people have jobs that are of no direct benefit to the consumer, and a consumer would never be able to buy anything of immediate use directly from those people. What do logistics experts, corporate event planners or database administrators have to sell to the consumer? The list goes on and on to include media relations consultants, training coordinators, etc. These people, although not selling anything directly to the consumer, are providing services that in the long run, may benefit the consumer.

In order to increase the supply of jobs or perhaps to devise more efficient ways of creating jobs and employment, companies concentrate on macroeconomics and try to expand the job market. One can say that jobs are created when a manager or entrepreneur attempts to find a new method to satisfy a need in a better and more efficient way. He creates a position and gives it a name. Modern jobs require a great deal of investment in human capital, on the part of both the company and the employee.

Although many people find jobs that require their particular skills, others cannot find employment, so the government must step in by creating jobs. Prior to the Great Depression that began in 1929, the thought that a government must create jobs for the unemployed would have sounded ludicrous, however after that period, governments did exactly that in order to increase employment. The United States government embarked on a scheme known as the Job Creation Program, aimed at employing people in massive projects to construct roads, repair infrastructure, build dams and improve the transportation system.

During the Great Depression, the United States government introduced its first large-scale job creation program as part of the New Deal. Many governmental departments, such as the Public Works Administration, Civilian Conservation Corps and Civil Works Administration, all created new jobs for the unemployed. Thousands of jobs were created by the Work Progress Administration. In 2011, President Barack Obama suggested a similar initiative using innovation economics to create new jobs.

Job creation does not necessarily mean creating new jobs that did not exist; it also covers efforts to keep jobs that already exist and are in danger of being lost. On March 9, 2002, the U.S. Congress signed legislation to try to stimulate the economy, which was mired in recession and economic contraction as a result of the terrorist attacks of September 11, 2001. The law provided businesses and individuals with tax breaks in order to maintain employment levels.

Generally, after a recession, the United States economy is able to recover nearly all jobs lost within about 13 months. If that statistic remains true, in July or August 2010, the economy should have created 10 million new jobs to make up for the job losses of the recession that ended in June 2009. However, those jobs never materialized.

The reasons for this lack of job creation included a failure of the collapsed housing market to bounce back. Jobs in that sector could not be restored within the usual time period, if ever. The second reason given is because of a tremendous gain in productivity in the U.S. factories, there was no need to create new jobs.

Job Creation: Selected full-text books and articles

The Role of Entrepreneurship in U.S. and European Job Growth By Bednarzik, Robert W Monthly Labor Review, Vol. 123, No. 7, July 2000
Government Job Creation Programs-Lessons from the 1930s and 1940s By Long, Jennifer Journal of Economic Issues, Vol. 33, No. 4, December 1999
The Nature of Occupational Employment Growth: 1983-93 By Rosenthal, Neal H Monthly Labor Review, Vol. 118, No. 6, June 1995
Creating Industrial Capacity: Towards Full Employment By Jonathan Michie; John Grieve Smith Oxford University, 1996
Employing the Unemployed By Eli Ginzberg Basic Books, Inc., 1980
Rich Democracies: Political Economy, Public Policy, and Performance By Harold L. Wilensky University of California Press, 2002
The Role of Firms in Job Creation and Destruction in U.S. Manufacturing By Schuh, Scott; Triest, Robert K New England Economic Review, March 2000
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