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Economists: Job growth on track

BridgeTower Media Newswires//September 21, 2017

Economists: Job growth on track

BridgeTower Media Newswires//September 21, 2017

By Jennifer Norris

jobs-infographic-copyJudging by President Donald Trump’s Twitter account, it would be easy to believe the jobs situation and the U.S. economy have never been better.

“Excellent job numbers just released – and I have only just begun,” he tweeted about the July jobs report.

Well, not so fast, says Robert Dauffenbach, a professor at the University of Oklahoma and director of OU’s Center for Economic and Management Research.

The nation is on pace to add about 2.4 million jobs this year, Dauffenbach said, which is good, but not an increase over the nation’s recent past year-over-year job growth.

Robert Dauffenback
Robert Dauffenback

In 2016 the nation added an average of 194,000 jobs per month for the first seven months of the year, while 2017 has seen an average of 184,000 per month for the same period.

Additionally, both 2016 and 2017 are down slightly from the peak jobs gains of 2014 when the nation added as many as 300,000 some months, making for a total gain of nearly 3 million jobs for the year.

Put another way, 2017 is on track to add the fewest jobs in seven years, but that doesn’t mean it’s bad news, Dauffenbach said.

“I’d say these numbers are OK,” Dauffenbach said. “I’d say they’re on an even keel.”

Dauffenbach credits the unprecedented job growth of 2014 and 2015 to what he describes as the nation’s fortunate recovery from the Great Recession, and he said former President Barack Obama deserves some credit for pulling the nation out of that morass. However, he points out, presidents don’t typically influence the economy much.

“It’s very hard to ascribe our economic situation to a president,” Dauffenbach said. “We have an $18 trillion-plus economy, and it doesn’t move around much. And when it does, it moves slowly.”

Anirban Basu, an economist and CEO of Sage Policy Group in Baltimore, Maryland, was also skeptical about the president’s impact on the economy.

“How much credit should Donald Trump get for economic performance today? I would say almost none,” he said. “And that’s not an indictment of him. Any president who had been in office for the neighborhood of eight months would receive little credit or blame for the performance of the economy.”

Basu believes the president could have legitimately claimed some credit for the economy if he had been successful in passing tax reform or an infrastructure or stimulus package, but so far, he said, the facts are that the Trump administration has done little legislatively.

“Now there has been a surge in business confidence, which has been at multiyear highs based on various surveys,” Basu said. “But as confidence has risen, my very strong perception in looking at the data is that most CEOs are adopting a wait-and-see attitude. They might be thrilled by the idea of corporate tax reform, but they want to see it first before they respond from a business decision-making perspective, so we really have not seen a tremendous pickup in business spending.”

What we have seen is a continuation of the consumer-led economic recovery, now in its ninth year, which is creating jobs at a healthy pace in the manufacturing, trade and health care industries, Basu said.

On a local level, Shelley Cadamy, executive director for Workforce Tulsa, confirmed huge job growth in blue-collar jobs. In fact, there are so many job openings in Tulsa right now she said she’s not sure she can find enough people to fill the need.

One reason there are more jobs than employable people is a skills gap in what she calls the middle class of workers, where workers need more than a high school diploma, but not a four-year degree.

“It’s those associate-degree level jobs that are just killing it right now,” Cadamy said. “We really need people in manufacturing and the trades and health care and IT.”

Both Cadamy and Basu agreed that Americans are too overeducated for their own good.

“Americans have become so fixated on four-year degrees, and for some it might be the right thing to do,” Basu said. “But sitting out there right now in college classes is someone who is perfectly mediocre in class, maybe worse than that, but they would be an awesome carpenter.”

This leads to a lot of underemployed people, Cadamy said, where, for example, someone with a four-year degree might be working in retail, because a lot of people simply cannot find a job in their degree field.

“Let’s say you’re born and raised in Tulsa and you want to continue living in Tulsa, but you have a degree in physics,” Cadamy said. “You’re going to have a hard time finding a job in physics in Tulsa.”

This is another issue further complicating the jobs and skills mismatch for millennials, who often pick a place to live and then try to find a job, rather than following a job wherever it takes them, as so many of their parents have done, Cadamy said.

An August Associated General Contractors of America survey of construction companies found that 78 percent of Minnesota respondents are having trouble finding craft workers. Only 10 percent said they are having no trouble filling any positions.

Tim Worke, CEO of AGC-Minnesota, said the Minnesota market is seeing strong demand for construction services. That’s a good problem to have, but it also puts that much more pressure on the workforce pipeline. “There are only so many bodies and everyone wants them,” Worke said. Among the Minnesota survey respondents struggling to find craft workers, 63 percent said they are looking specifically for carpenters. Other trades in high demand include heavy equipment operators (57 percent), concrete workers (46 percent) and laborers (44 percent).

Overall, economists agree the jobs picture is bright in the nation right now, but those who want guaranteed employment can avoid the debt of that four-year degree by embracing the boom in associate-level jobs. Those set on using their four-year degree might just have to consider moving for their job.

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