Just Who Creates Jobs?

The current notion that we are in a recovery, but that unemployment may not improve for many months (most predict it will be over 10% for some time) is preposterous.  There is no real recovery until people are able to find jobs and get back to work.

So just where are these jobs going to come from?

Even the New York Times seems to understand that there is no recovery without jobs.  However, as seen in an editorial from Sunday's NYT, they really don't understand what history and economics teach us about how job creation really happens in a recovering economy.  From the 10/4/2009 NYT:

If successful, ambitious goals like health care reform and energy legislation may generate jobs, but officials have not persuasively linked them to job growth. Congress and the administration also have not done enough to directly create jobs. That could be done with more stimulus to spur job creation, or a large federal jobs program, or tax credits for hiring, or all three. Or surprise us. Just don't pretend that the deteriorating jobs picture will self-correct, or act as if it is tolerable.

So all we need is government to do more, and we will be OK?  Sorry, neither big government nor big corporations feeding at the government trough have ever brought us out of a recession and into a sustainable recovery.

Carl from Chicago at the blog Chicago Boyz has written a well reasoned excellent counterpoint to the editorial at the Times in a blog post yesterday (it is well worth your time to read his entire post):

A parallel item is that most job creation doesn't come from large enterprises, it comes from smaller companies. These companies have been hammered by the recession, and find it difficult to raise capital. These companies are also very likely to be impacted by items like the probably rise in estate taxes, and the continued increase in marginal tax rates, which reduce the payoff to match the significant risks taken by entrepreneurs. Minimum wages are higher, and any sort of employer mandate on health insurance will be a body blow that has to color any sort of hiring decision on the horizon.

The overall summary isn't that I have the answers to the "job creation" conundrum; the summary is that at least I understand that jobs don't "exist" independent of a need for labor by profitable enterprises that overcomes all the uncertainty, other options, and hurdles involved in this sort of decision in the current difficult business climate.

Creating jobs -- sustainable jobs -- will take a long time, a lot of hard work, and some significant risk taking from entrepreneurs around the globe.  Asking the government to "do more" will not create any jobs.  An activist governmental policy toward the economy will only inhibit these entrepreneurs from doing their work.

(Thanks to James Shewmaker for passing along the Chicago Boyz post this morning).