The House Energy and Commerce Subcommittee on Commerce, Manufacturing, and Trade, chaired by Rep. Mary Bono Mack (R-CA), today held a hearing entitled, "Where the Jobs Are: Employment Trends and Analysis." Today's hearing was the first in a series of hearings the subcommittee will hold this year to examine employment trends and explore ways to stimulate job creation and bring jobs back to America.
While the so-called Great Recession officially ended in 2009, members on both sides of the aisle acknowledged the road to recovery is far from over. There are nearly six million more Americans out of work today than there were prior to the beginning of the recession, and labor statistics suggest true unemployment is much worse. Today's witnesses described past and current trends in American labor markets and explained a number factors contributing to job creation.
Harold Sirkin, Senior Partner and Managing Director at the Boston Consulting Group offered a positive outlook for American manufacturing, suggesting American companies will soon have a competitive cost advantage over Chinese manufacturers. Due to rising labor costs in China, companies are beginning to rethink their decisions and bring their businesses and jobs back to America. The Boston Consulting Group projects the United States has the potential to add up to 3 million new manufacturing jobs over the next decade, but Sirkin warned we must promote pro-growth policies to reach this potential and remain competitive in a global economy. "Once again, our amazing economy is responding. Once again manufacturing is growing in the U.S. because of our underlying advantages. While this is just taking hold now, government policy can help accelerate the trend. Whether it is providing funds to train American workers, reforming our tax system or finding ways to level the playing field with our competitors, our government can make a difference," said Sirkin.
John Berlau, Director for the Center for Investors and Entrepreneurs at the Competitive Enterprise Institute, said new regulations have stunted economic growth, making it more difficult for American entrepreneurs to raise capital and create jobs. "This regulatory overhang may explain part of the slower-than expected recovery. According to the Treasury Department's IPO Task Force, the long-term decline in IPOs over the last decade may have cost the economy as many as 22 million jobs not created during that period," said Berlau.
"Regulatory burdens over the past decade -- such as the Sarbanes-Oxley Act and restrictions on the compensation of analysts covering small firms for investment banks, along with looming burdens of Dodd-Frank, have skewed emerging growth firms away from going public and toward more debt financing of growth, as well as toward mergers and acquisition rather than initial public offerings."
John Abowd, Professor of Economics at Cornell University, discussed employment growth rates in America over the past ten years, explaining the reason for today's slow growth is a lack of fluidity in the market. "The rate of movement in the economy--the ability of workers to move around and to get to new jobs where they are being created--has seriously gone South," said Abowd. "If workers can't move around to find the new jobs, and businesses can't adjust to find the new jobs, this excess separation--excess reallocation--won't occur. I urge you to promote policies to put the fluidity back into the labor market to get this churning rate going again."
"This is our chance -- in fact, the best chance we've had in decades -- to make "Made in America' matter again," said Bono Mack. "But to be successful, we must remove the roadblocks and barriers businesses are facing today when it comes to job creation. Embracing tax reform, regulatory reform, and tort reform are just some of the things Washington can do to help jumpstart real job growth in America."