Opinion: What's Ahead for Jobs in 2010?

(Jan. 8) -- The government reported today that unemployment in 2009 ended up at 10 percent. The average rate for the year was more than 9 percent, making it the worst year for unemployment since 1983. But that's last year's news. What can families expect this year? And what, if anything, can be done to improve the jobs picture in the U.S.?

To get an answer, Sphere asked a wide range of experts to weigh in on these questions. Their answers are below (you can click on the links below to jump to specific contributors).

Rep. Carolyn B. Maloney, D-N.Y., chairwoman of the Joint Economic Committee: Some hopeful signs, but much to be done.
Dr. William Dunkelberg, chief economist, National Federation of Independent Business: Want to create jobs? Give small businesses a break.
Lynn Reaser, president, National Association of Business Economists: A brighter year for jobs.
Robert S. Stein, senior economist, First Trust Advisors: Health care bill is dampening job growth.
Robert E. Litan, vice president, The Kauffman Foundation, senior fellow at the Brookings Institution: It's going to get worse before it gets better.
Lawrence Mishel, president, Economic Policy Institute: We're in a deep hole, and the government needs to create jobs.
Ben Mangan, CEO, EARN: Help for low-income workers needed.

Some Hopeful Signs, But Much to Be Done
By Rep. Carolyn B. Maloney
Democratic congresswoman from New York and chairwoman of the Joint Economic Committee

Today's jobs numbers are clearly disappointing. And overall, it just fuels my resolve to get even more aggressive about job creation, and I have asked employers for their new ideas to do so. But the bottom line is that we need to remember what we were experiencing a year ago and how far we've come as the chart below shows.

I am hopeful that in the year to come, we will see job growth in two of the hardest hit sectors in this recession because of the numbers in today's jobs report.

Manufacturing has slowed its job losses from a year ago. In January 2009, this sector lost 262,000 jobs. In December, that number was 27,000. There are signs that we'll see job growth in this sector, such as increases in new orders for manufactured goods in seven out of the past eight months, while inventories have been declining. Soon, manufacturers will need to start restocking their depleted inventory.

We also saw some improvement in the hard-hit financial sector, with job creation in finance and insurance. Last year, the financial sector had a severe meltdown, and the small but positive job creation news in this sector is encouraging.

In the coming months, I will work with my congressional colleagues and the administration to ensure that the private sector can continue this progress. We will be laser-focused on creating jobs and helping to build new industries and sectors that will establish a stable foundation for our economy and spark a robust labor market.

Want to Create Jobs? Give Small Business a Break
By Dr. William Dunkelberg
Chief economist, National Federation of Independent Business

There is no real strength in job growth because there is no real strength in spending. It's picking up, but not returning to the levels that supported the employment levels of 2007. Employment reductions have proceeded faster than the decline in GDP (thus strong productivity numbers), creating the possibility that employment could respond faster in the early part of the recovery than many expect, if owners become optimistic about economic recovery.

However, there is no indication that job growth will be strong enough to dramatically reduce the unemployment rate. Over the next three months, 15 percent plan to reduce employment, and 8 percent plan to create new jobs, yielding a seasonally adjusted net-negative 2 percent of owners planning to create new jobs.

New firms are being created as well, and they will boost the employment numbers. But unknown costs loom: health care, cap and trade, yawning deficits, paid family and medical leave, card check, the expiration of the Bush tax cuts, state decisions about their finances.

Washington can't expect small-business owners, facing difficult economic circumstances anyway, to commit themselves to investing in new employees or equipment and vehicles without acknowledging and revealing the policy-related costs that will be imposed on them.

National policy should encourage the formation of new firms by, among other things, liberalizing the tax write-offs a new business can claim in its first year and eliminating the payroll tax for a specified period.

2010 -- A Brighter Year for Jobs
By Lynn Reaser, Ph.D.
President, National Association for Business Economics, and chief economist at Point Loma Nazarene University

Following two years of devastating job losses, 2010 should see companies starting to again add to payrolls. In many cases, firms may have cut back staffs too severely because of fears that the recession might persist for a protracted period. A stabilizing housing market, higher stock prices and stronger orders are beginning to restore business confidence.

For most of last year, firms relied on productivity gains from shrunken work forces to meet their requirements. More recently, they have asked their employees to work longer hours and tapped temporary staffing agencies. Now they need to start hiring.

Do not expect the unemployment rate to drop quickly even as job growth resumes. We will need to find jobs not only for the people who are currently looking for work but also for first-time job seekers and those returning to the workforce.

Is there anything that can be done to improve prospects for job seekers? Our educational system will be the most important factor affecting the American labor market as we move forward. This applies not only to our K-12 system but to our colleges and universities as well. Business schools are beginning to rethink their curricula. All educational institutions need to re-evaluate their programs to ensure that graduates are true assets to employers.

Health Care Bill Is Dampening Job Growth
By Robert S. Stein
Senior economist, First Trust Advisors, an investment management firm based in Wheaton, Ill.

The headline payroll data were not as good as expected in December, with nonfarm jobs declining 85,000. However, the other data in the report suggest payroll growth will start again very soon. We say "again" because revisions to last month's data show payrolls increased 4,000 in November, the first gain in two years.

Two other positive numbers jumped out of the report. First, finance/insurance jobs increased 10,000 -- the most in three years. Second, temp employment -- traditionally a leading sign of labor demand -- increased for the fifth straight month. Given the economic growth we've had since the summer, we think the jobless rate probably peaked at 10.1 percent in October. The jobless rate will not decline every month but is likely to drop by about a percentage point by the end of the year.

The drop in payrolls in December will likely generate more discussion in Washington on policy changes to improve the labor market. In one sense, the best counsel is patience, to simply wait out the normal time lag between healthy economic growth, which we now have, and improvement in the labor market.

However, both uncertainty surrounding health care policy as well as the actual substance of the bill wending its way through Congress are detrimental for employment growth. The best possible news that could come out of Washington would be if one Senate Democrat decides to keep debating health care rather than voting to cut off debate on the current bill.

It's Going to Get Worse Before It Gets Better
By Robert E. Litan
Vice president for research and policy, The Kauffman Foundation, and senior fellow, The Brookings Institution

The jobs outlook for U.S. workers in 2010 is likely to get worse before it gets much better, and there's not much that policy makers can do about it.

The jobs math works like this: For the unemployment rate to fall, the demand for goods and services (GDP) must grow faster than the sum of labor force growth (1 percent) and productivity (1.5 percent to 2 percent), or 2.5 percent to 3 percent.

In normal expansions, GDP grows faster than this, which is why unemployment falls. But this expansion is hardly normal. Consumers are scared, many more banks will fail, and others have yet to take write-downs on their sour commercial mortgages. It will be surprising, therefore, if the economy can grow fast enough to reduce the unemployment rate much below the current 10 percent.

Unfortunately, there's not much that Congress or the president can do in the short run to help. Much more stimulus is ruled out by our already massive federal budget deficit. The best we can hope for is that the Fed withdraws its stimulus at a slower pace than has been announced.

Ultimately, policy makers need to give far more attention than they have up to now to facilitating the formation and growth of new firms, since firms five years or younger over the past 30 years have accounted for virtually all net job growth.

We're in a Deep Hole, and the Government Needs to Create Jobs
By Lawrence Mishel

President of the Economic Policy Institute. For more information about EPI's jobs plan, visit www.AmericanJobsPlan.org.

The economy shed 85,000 jobs in December 2009, the Labor Department reported this morning. The unemployment rate stayed at 10 percent, but the reason it didn't increase is because so many people gave up looking for work and are therefore no longer counted as unemployed. This news is grim enough. Yet in all likelihood, barring aggressive action from the federal government to create jobs, the unemployment rate will be higher in the fall than it is now.

How deep is the jobs hole we're in? We'd have to create roughly 549,000 jobs every month for the next 24 months to get back to the 4.9 percent unemployment rate we had in 2007, before the recession began. The U.S. hasn't experienced job growth that rapid and sustained since 1950-51, two of the best years on record for job creation in the U.S. The economy grew an average of 8.2 percent in each of those two years; it's expected to grow by an average of 3 percent in each of the next two years.

The bottom line is that it could be a very long time -- five years or more -- before unemployment returns to 4.9 percent, unless the federal government takes strong action now to create jobs. Elected leaders in Washington, some of them unwilling to spend on job creation because of misguided fears about budget deficits, should know that over the long term, deficits will be higher if this jobs crisis is allowed to persist.

High unemployment is not a situation we must accept. We can put people back to work now with public service jobs programs and critically needed investments in infrastructure. And we can prevent mass layoffs in the public and private sectors by providing budget relief to cash-strapped state and local governments. The alternative is a protracted and painful unemployment crisis.

Help for Low-Income Workers Needed
By Ben Mangan
President, CEO and co-founder of EARN, a California-based nonprofit focused on helping low-income families build wealth.

Today's sobering unemployment figures from the Bureau of Labor Statistics comes as particularly disheartening news for America's low-wage workers. We've lost millions of jobs that won't be coming back. And many of those who have been hit the hardest were already considered low-income workers even before our recession began.

In this climate, it's important to remember that our unemployment woes are not just about job creation. We need to create a foundation that will sustain us in future downturns.

Here's something that's proven to work especially well: matched savings accounts, targeted to help low-wage workers invest in assets that create prosperity over time. Experts estimate that for each federal dollar invested in matched accounts, five dollars are pumped back into the national economy. Investing in small businesses means job growth; education gives us a more skilled, higher-paid work force; homeownership yields far-reaching benefits for generations to come. And we all reap benefits such as less welfare expenditure and more civic engagement.

In a consumer-driven economy like ours, the focus on unemployment statistics is understandable. Let's remember that it's equally important to give all working Americans the tools to weather the next financial storm.

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