President Obama is in Michigan today for a speech where he’s setting a goal of 5 million additional community college graduates by 2020, at a cost of $12 billion over the next decade.
The context is important. Michigan’s unemployment rate is 14 percent, much higher than the national average of 9.5 percent.
Obama is in Michigan to say that the economy is changing and the work force needs to change with it.
“..[T]he hard truth is that some of the jobs that have been lost in the auto industry and elsewhere won’t be coming back. They are casualties of a changing economy,” Obama says in his speech.
“In the coming years, jobs requiring at least an associate degree are projected to grow twice as fast as jobs requiring no college experience,” Obama says. “We will not fill those jobs – or keep those jobs on our shores – without the training offered by community colleges.”
Rep. Candice Miller, Michigan Republican, spoke to reporters earlier today and said basically that Washington and the administration don’t get how bad it is for people out in the heartland, and that Obama’s talk of higher education is not enough.
“He’s talking about higher education, and I’m appreciative of that, but we are looking for job creation right now,” Miller said.
“When I come here in Washington sometimes I feel like I’m in the bubble; I’m in a parallel universe,” she said. “When I step off the airplane at Metro Detroit honestly the anxiety level is palatable. You cannot believe what is happening to us economically.”
But Obama said earlier today that the economy will likely continue to shed jobs for the foreseeable future.
“My expectation is, is that we will probably continue to see unemployment tick up for several months,” he said.
We’ve got to find new models of economic growth, particularly at a time when consumers are just not going probably going to be spending as much as they were — and that has been driving a lot of the economic growth over the last several months.
… The single biggest challenge that not just the United States face but countries in Europe and all around the world are going to face as we come out of the recovery is how do we generate enough jobs that pay good wages to keep up with population growth.
… And unless we are investing in energy, infrastructure, innovation, science, development, and eliminating the drag the health care system is placing on the overall economy, I think we will have a very difficult time generating the jobs that are necessary. If we make those investments, then I have confidence that we’ll be able to do so.
The Wall Street Journal carried an editorial this morning by Mortimer Zuckerman which makes the point that jobs are not going to be reappear at the same rate at which they disappeared.
The likelihood is that when economic activity picks up, employers will first choose to increase hours for existing workers and bring part-time workers back to full time. Many unemployed workers looking for jobs once the recovery begins will discover that jobs as good as the ones they lost are almost impossible to find because many layoffs have been permanent. Instead of shrinking operations, companies have shut down whole business units or made sweeping structural changes in the way they conduct business. General Motors and Chrysler, closed hundreds of dealerships and reduced brands. Citigroup and Bank of America cut tens of thousands of positions and exited many parts of the world of finance.
Obama said earlier today in the Oval Office, the country can’t afford a “jobless recovery.” He says healthcare reform, energy reform and education reform will invest in new industries and create the jobs of the 21st century that will replace the old, manufacturing-type of blue collar work.
Zuckerman, however, said that the administration’s $787 billion stimulus plan was “supposed to be about jobs but it wasn’t.”
“Too much of the money went to transfer payments such as Medicaid, jobless benefits and the like that do nothing for jobs and growth.
“The spending that creates new jobs is new spending, particularly on infrastructure. It amounts to less than 10% of the stimulus package today.”
The White House has also come under fire for its claims that the stimulus would “save or create” 3.5 million jobs. I’ve written in some detail about this claim, both on the methodology used and on the hits the administration has taken over its claim to be able to project into the future about jobs saved or created.
Christina Romer, chairman of the president’s Council of Economic Advisers, admitted in an interview with CNBC yesterday that the administration cannot really know for certain how many jobs are created or saved.
“It’s very hard to say exactly because you don’t know what the baseline is, right, because you don’t know what the economy would have done without it,” Romer said.
Grover Norquist, president of Americans for Tax Reform, said that “the claim of ‘saving or creating’ jobs was a lie from the beginning, and now they’ve admitted as much.”
But the White House said today that the jobs “created or saved” projection is based on modeling and said they are not backing away from their claims.
“The estimate of how many jobs saved or created is based on the same criteria that has been used by top economists for decades to determine predictions and we remain as confident in our predictions as we were the day we made them,” said White House deputy press secretary Jen Psaki.
“Christy Romer will report to Congress on the status of the economy including how many jobs have been saved or created and in response to the question she simply discussed the data she would focus the report on,” Psaki said.
Here’s Romer’s interview:
UPDATE - 10 P.M. - In light of the above material on jobs “saved or created,” here’s an interesting exchange from the briefing that White House press secretary Robert Gibbs did today on board Air Force One.
Q: Do you know how many jobs have been created so far in Michigan?
MR. GIBBS: I don’t have an exact Michigan figure, no.
— Jon Ward, White House reporter, The Washington Times
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