- Fred Dedrick: Jobs Act will help in the long term, but we need to help job seekers now
- The private sector can work with the public to invest in job creation, Dedrick says
- Most important, he says, are job training programs that help businesses and job seekers
- Dedrick: Warren Buffett could put up $5 billion to create jobs; corporations could match
President Barack Obama has outlined his ambitious American Jobs Act, which contains many good elements to stimulate the economy in the long term. Yet its impact will take many years to significantly reduce the 25 million people looking for full-time work.
Cutting payroll taxes is great for those of us who have jobs, but it's impossible to predict what effect it will have on the unemployed. Tax credits might work in some industries, but there isn't much evidence they produce jobs that weren't already being planned. Although infrastructure investments are critical, the effect on joblessness will be very slow to materialize. Somehow we need to get wages into people's pockets by the first quarter of 2012.
The pain in our communities is such that people are impatient with solutions that are long-term and unpredictable. Instead, we must focus on initiatives that can put people back to work and avoid government bureaucracy. While Congress is considering the president's proposal, we need the private sector to make immediate investments in job creation.
The National Fund for Workforce Solutions, working with 31 regions, urban and rural, from Seattle to Sarasota and San Diego to Hartford, has ideas to help.
First, get serious about the skills gap. It's not going to put millions back to work, but it sends a strong message to all employers that America will train good workers to fill their needs. It also gives hope to people who are willing to put in the effort to learn new skills. Federal job training money is depleted, but the hundreds of workforce partnerships in key industries can put flexible dollars to work right away.
These partnerships have organized employers and know where the gaps are. They are ready to train to industry-recognized credentials for available jobs. We can't wait for school reform, or for a two-year associate's degree graduate. We need intensive training over six months with a minimal training stipend, so workers can be trained full time. The president's plan has some support for "sectoral" training, but it's unclear how much funding will be available for this critical initiative.
Second, Warren Buffett says he is willing to pay more taxes. Ask him for a contribution of $5 billion to create jobs in small businesses. Challenge America's corporations to match Buffet's Billions for America. All funds would go to "on-the-job training." Any company that hires someone as a trainee will have that person's wage subsidized to 75% for 12 to 18 weeks in exchange for a specific skill training or industry-recognized credential.
Companies will not be required to hire the person but must sign a memorandum of understanding that indicates there is a reasonably good chance the person will be brought on full-time. Combined with the president's tax credits for hiring, this will be a powerful incentive for companies to start hiring again.
Third, encourage significant new private-sector investment in initiatives, such as the Social Innovation Fund, that distribute dollars to nonprofit organizations. Nonprofits react quickly, know how to stretch a dollar and reach people struggling to support families. Require that the nonprofit use the funding to hire the unemployed. Urge the nonprofits to focus on hiring people ages 18 and 28, especially veterans. All hiring must be completed within six months of fund distribution for jobs that will last at least until December 2013. No money for overhead, only for hiring. With the right financial resources, nonprofits can start hiring within a few months.
The American Jobs Act is an excellent start in changing the economy's momentum. But for the millions of Americans who need work now, we must aggressively counteract what could be a slide into a second recession.
People with paychecks buy stuff. They create the demand that forces companies to start hiring. This leads to more demand for goods and services. Let's find a way to get America back to work, as the president said: "Right away."