The Clinton Global initiative was created in 2005 to “inspire, connect, and empower a community of global leaders to forge solutions to the world’s most pressing challenges.” Seven years ago, when developed economies were still growing at a healthy clip, Clinton’s organization was focused mainly on the many problems of the developing world. But the financial crisis of 2008 fundamentally rearranged the world, and now one of it’s most pressing problems is over-indebtedness, anemic growth and unemployment in some of the world’s richest countries.
In response to these issues, former President Clinton formed Clinton Global Initiative America in 2011, and the organization launched its second annual meeting yesterday in Chicago. The forum got right down to business with it’s first session “Jumpstart Nation: Getting America Back to Work.”
TIME’s own Fareed Zakaria opened the forum, declaring his optimism at the chances of a full recovery of the American economy. He cited the many economic crises that America has weathered since his immigration to the U.S. in the 70s. After each downturn – from the stagflation of the 70s through the dot-com bubble bursting ten years ago — America regained it’s strength in both employment and output terms.
But Zakaria’s optimism wasn’t without qualification. This crisis dwarfs any we’ve had since the 70s, and the world is surely changing. Zakaria said that the past twenty years the world has gone through two profound revolutions: a globalization revolution and a technological revolution. And these forces are “acting like a pincer movement on the American worker.” So how do American workers adapt to these changes, and what can institutions – public and private – do to help them in this process? Clinton’s star-studded panel offered many interesting observations about the American economy, and many solutions to America’s employment crisis, but their insights fell into three main categories:
1. Infrastructure: This used to be a bi-partisan no-brainer. Even the most conservative Republican in Congress sees a role for the federal government in building roads, bridges, airports and maintaining public resources like the electrical grid. Sure liberals like to take this idea further – with investments in green energy systems and high speed rail – but the positions of the two parties on infrastructure spending have usually not been so far apart as to prevent getting the funding we need to buttress the endoskeleton of the economy. But historic gridlock in Washington has made it difficult to find enough common ground on this issue.
And this is particularly difficult to understand given the historically low financing costs the American government has at its disposal. The American government can borrow money over ten years at the jaw-dropping rate of 1.66%. As Zakaria said, “If you can’t make productive investments with money this cheap, you shouldn’t be running anything.” Infrastructure, Zakaria said, can be a great way to promote employment in the short term, and promote future growth down the road.
2. Manufacturing: According to former President Clinton, we have seen 33 straight months of manufacturing job growth. Indeed, manufacturing job growth has been one of the bright spots of the recovery, and will continue to be a leading factor in America’s resurgence. “A lot of them are clearly jobs being brought back to America,” he said.
This phenomenon of “re-shoring” is happening for several reasons. Rising energy costs around the world, and plummeting energy costs at home due to the natural gas boom have made making in America more economical. Manufacturing centers abroad, like China, have also seen steadily rising wages, making American workers more competitive. Of course, the past few generations have seen U.S. manufacturing employment decline, but total manufacturing output by U.S. companies has continued to grow. ”The U.S. does produce more [manufacturing goods] than China, India, Brazil and Russia combined,” Darlene Miller, President and CEO of Permac Industries and member of the panel told the crowd. “But our biggest problem is finding skilled labor.” The problem is that though the U.S. manufactures a great deal, most of it is done using very complicated, high end machinery. Operating this kind of machinery takes specific skills, which leads us to the next big theme of the forum . . .
3. Education: There’s been much discussion lately about the skills gap, and anecdotal evidence has shown that there are many companies – specifically tech and high-end manufacturing firms – that have numerous job openings that they simply can’t fill. You can debate whether this is huge driver of unemployment or not, but if there’s even one job in America that Americans aren’t skilled enough to fill, that’s a failure on the part of the education system and the business community. That’s why Miller started a program called “Right Skills Now,” which coordinates with community colleges to train workers in the skills employers need now. The program is an 18 week training course followed by an eight week internship, after which students can either look for employment with their company they interned for, or continue on with additional schooling. “We have 600,000 openings in manufacturing today,” Miller said. “We don’t have an unemployment issue, we have an employment issue.”
Miller and others on the panel argued that many Americans need to move away from the four-year degree model and start thinking about what kind of employment they want while they’re still in high school. By pursuing post-secondary training that is cheaper in terms of time and money, young Americans can train themselves for good paying jobs they already know are out there.
Obviously, none of these programs and proposals are a panacea for the American economy. In fact, with problems in our economy so manifest and widespread, it can seem like a waste of time to sit around in a fancy lecture hall chatting about ideas that will realistically only help on the margins. That being said, getting leaders in business, education and government together at the same table, talking about the big challenges we face can make a difference over the long run. Issues like what sort of education Americans aspire too are largely cultural. The only way to change those attitudes and expectations is to discuss solutions in a highly visible way.