Em­ploy­ment crash de­mands real change

The Washington Times Weekly - - Commentary -

It’s al­ways dan­ger­ous to fore­cast the fu­ture, and pro­ject­ing the out­look for Amer­i­can pub­lic pol­icy is par­tic­u­larly chal­leng­ing. Po­lit­i­cal crys­tal balls are no­to­ri­ously cloudy.

Yet here’s a pretty safe bet. Right now, it looks as if one is­sue will dom­i­nate the 2012 elec­tion: jobs. The party or can­di­date that ar­tic­u­lates a plau­si­ble plan for em­ploy­ment will win.

And I’ll go out on a limb again. This de­bate won’t end in Novem­ber 2012. Amer­ica needs a Jobs Decade — a com­pre­hen­sive and sus­tained ef­fort to rekin­dle em­ploy­ment growth over the next 10 years. This long-term pro­ject can­not wait; it must start to­day.

A re­cent re­port pub­lished by the McKin­sey Global In­sti­tute di­ag­noses our grow­ing jobs dilemma.

First, the re­port demon­strates that the U.S. is tak­ing in­creas­ingly longer to re­bound from eco­nomic down­turns. For ex­am­ple, be­tween Word War II and the 1980s, it took only about six months for em­ploy­ment to re­bound to pre-re­ces­sion lev­els. Af­ter the 1990-91 re­ces­sion, that num­ber grew to 15 months. Fol­low­ing 2001, the re­cov­ery pe­riod bal­looned to 39 months — and it’s get­ting worse. McKin­sey now projects it will take more than 60 months for em­ploy­ment to re­cover — about 10 times the length of eco­nomic mis­ery com­pared to 30 years ago.

In other words, our stub­bornly high un­em­ploy­ment rate will be our com­pan­ion for some time.

Sec­ond, the study points to the slug­gish pace of new-busi­ness cre­ation. McKin­sey notes there has been a 23 per­cent drop since 2007 in star­tups. This alone trans­lates to at least 1.8 mil­lion fewer jobs.

Fi­nally, the McKin­sey study projects that the U.S. econ­omy will have to pro­duce 21 mil­lion jobs over the next decade to re­turn to full em­ploy­ment.

That’s a tall or­der. So what can be done?

A group of lawmakers on the House En­ergy and Com­merce Com­mit­tee — the panel I chair — has al­ready be­gun to look for so­lu­tions. In our quest for job cre­ation, we keep un­cov­er­ing ev­i­dence point­ing to a ma­jor cul­prit be­hind the malaise: the vast web of costly, du­plica­tive and of­ten in­ef­fec­tive fed­eral reg­u­la­tions. This Wash­ing­ton­im­posed jug­ger­naut im­pacts ev­ery busi­ness or po­ten­tial busi­ness in in­dus­tries in­clud­ing health care, fi­nan­cial ser­vices, en­ergy and the en­vi­ron­ment.

The McKin­sey study agrees with our as­sess­ment. It con­cludes that reg­u­la­tions are one of the pri­mary drags on job cre­ation. De­lay, un­cer­tainty and higher costs im­posed by the gov­ern­ment cause busi­ness in­vest­ment to dry up or look for bet­ter op­por­tu­ni­ties in for­eign coun­tries.

The re­port re­veals an omi­nous concern among many busi­nesses: “[W]e have heard a rel­a­tively new and dis­turb­ing theme from some com­pa­nies: They hes­i­tate to in­vest in the United States be­cause of the com­plex­i­ties, real or per­ceived, of ex­ist­ing reg­u­la­tions and reg­u­la­tory pro­cesses.”

In the first six months of this year, the House En­ergy and Com­merce Com­mit­tee found moun­tains of ev­i­dence con­sis­tent with McKin­sey’s find­ings about the link be­tween reg­u­la­tory bur­dens and lag­ging job cre­ation.

In one ex­am­ple un­cov­ered this year, the En­vi­ron­men­tal Pro­tec­tion Agency and an ob­scure off­shoot of that agency, an En­vi­ron­men­tal Ap­peals Board, blocked the ex­plo­ration and pro­duc­tion of off­shore oil in Alaska that would have cre­ated thou­sands of jobs and eased con­sumer pain at the pump. We said enough is enough. The House re­cently passed leg­is­la­tion that came out of the En­ergy and Com­merce Com­mit­tee to put an end to these costly de­lays.

The reg­u­la­tory road­blocks ex­tend to oil from Canada as well: The Obama ad­min­is­tra­tion’s EPA con­tin­ues to throw new bar­ri­ers in the way of ap­prov­ing the Key­stone XL pipe­line from Canada, an­other pro­ject that would cre­ate thou­sands of jobs and more pricere­duc­ing sup­ply from a friendly neigh­bor.

Health care is an­other ex­am­ple. In­stead of try­ing to speed the process for get­ting in­no­va­tive med­i­cal de­vices and life­sav­ing medicines to pa­tients, the Food and Drug Ad­min­is­tra­tion is be­com­ing less trans­par­ent and more opaque, which is dra­mat­i­cally in­creas­ing the time it takes for such prod­ucts to reach Amer­i­cans who need them. Many health care ex­ecu- tives have told us they may leave the United States al­to­gether in search of a more in­no­va­tion-friendly po­lit­i­cal en­vi­ron­ment; the re­sult will be fewer jobs in Amer­ica and fewer break­through treat­ments for our pa­tients.

It’s time to stop view­ing Amer­i­can busi­ness as a juicy tar­get for power-hun­gry reg­u­la­tors and in­stead ac­knowl­edge its role in the job-cre­ation puz­zle.

The McKin­sey an­a­lysts agree with this view. “Gov­ern­ments at all lev­els can have an im­me­di­ate im­pact on U.S. job cre­ation by fix­ing how ex­ist­ing reg­u­la­tions are ad­min­is­tered. That means ac­cel­er­at­ing the speed of de­ci­sion-mak­ing, elim­i­nat­ing re­dun­dancy, and im­prov­ing in­ter­a­gency and in­ter­gov­ern­men­tal co­op­er­a­tion — steps that make it eas­ier for com­pa­nies to pur­sue in­vest­ment and ex­pan­sion while fol­low­ing the rules.”

We do need an Amer­i­can Jobs Decade.

But we’ll never achieve that goal as long as we slow down and sti­fle those try­ing to build it.

Re­form­ing our cur­rent reg­u­la­tory sys­tem will pro­vide the tools to help busi­nesses to in­vest, grow and hire peo­ple.

Rep. Fred Up­ton is a Repub­li­can from Michi­gan and chair­man of the House Com­mit­tee on En­ergy and Com­merce.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.