- The Washington Times - Thursday, February 26, 2004

If President Bush’s challengers continue to shout “jobless recovery,” then Republicans need to shout back “visionary Democrats” because their ability to grasp the economy at hand is too near-sighted for common sense. Over the past two weeks, the political pinata has been N. Gregory Mankiw, chairman of the President’s Council of Economic Advisers, who has been under attack by these visionary Democrats at the suggestion that outsourcing should be considered another form of international trade.

While both Mr. Mankiw and the president himself have clarified their belief that no, they are not in favor of U.S. job losses, this has not stopped the Democratic onslaught. Democratic lawmakers railed against Mr. Mankiw’s comment, criticizing the Bush administration for being “out of touch” with concerns over the loss of American jobs. Criticizing the president for “Alice in Wonderland” economics, Sen. Tom Daschle, South Dakota Democrat, introduced the Jobs for America Act, seeking to punish American firms that take jobs offshore.

Ironically, the Democrats leading presidential hopeful, Sen. John Kerry of Massachusetts, had a small outsourcing scandal of his own uncovered in Wisconsin recently when alert voters noticed on their caller-ID that his campaign’s telemarketing calls were coming from Canadian numbers. Is there no shame?

What Democrats are taking advantage of is the fact that while the rules of the global economic game have changed, the scoring of economic growth has not. Mr. Bush’s Council of Economic Advisers has forecast that 2.6 million new jobs will be created in 2004. According to a report from the Center for Labor and Market Studies at Northeastern University, the Labor Department’s job scoring is based on an outmoded survey of 400,000 large employers. As such, the government’s scoring methodology fails to capture jobs being generated by small businesses, making traditional payroll jobs a notoriously lagging indicator of job creation. Thus, we may in fact be far underscoring the number of traditional jobs being created in today’s economy.

More importantly, creating “jobs” today may not be equated with creating “work.” Today, there is a revolution going on that is transforming the employment relationship and redefining our conception of work and employment. While outsourcing has been blamed for job losses in the United States, the push for outsourcing is in fact creating a wealth of economic opportunities for a growing class of self-entrepreneurs in America.

At present, almost 10 million Americans are in the work force, but not in traditional jobs. They are working on a contract basis, rather than in permanent employment relationships. The good economic news is that these are professional service providers, choosing to work for high rates of pay and catering to the needs of companies, who are indeed creating work without creating jobs.

Gene Zaino, president and CEO of MyBizOffice.com, a leading employment services provider to contingent professional workers, is seeing demonstrable evidence of this tectonic shift in employment relationships. Mr. Zaino said, “We’ve seen, across the board, a universal increase in the dependency on contract workers.” He said his company has seen a doubling in the past year of the knowledge workers who are working on a contract basis, with many top companies — and even the federal government — rapidly increasing their contracting of technology professionals, business managers, economists, lawyers, freelance writers, background investigators and engineers.

More and more, these self-starters are choosing this route for their own careers over traditional employment to build a secure future for themselves and their families. In a post-Enron, post-tech-bubble environment, these knowledge entrepreneurs are setting up not a traditional store front, but businesses based on the skills they have built and the value-add they can deliver to clients worldwide. Likewise, companies, seeking to maintain their strategic flexibility, are making strategic human-resource decisions on what tasks make sense to do in-house and what tasks to outsource.

Research has proven that companies that seek to outsource purely to cut costs in the short-term have consistently underperformed those that make such decisions to maximize the value of their product or service for their customers. Thus, in an ironic twist, economic security — both on an individual and collective basis — is rooted not on traditional “jobs,” but on a contractual, contingent basis.

Thus, it is clear that the “jobless recovery” is a myth — a greater oxymoron in the company of “jumbo shrimp” and now “visionary Democrats.” While companies may not be adding traditional jobs as they have in the past, self-entrepreneurs are creating entire businesses for themselves from the work that is being generated by companies — large and small — in the midst of the recovery. The Bush administration needs to change the terms of the debate and trumpet the rapid growth of the contingent work force, where work and wealth are being created for individuals, while improving the economic competitiveness and fortunes of citizens and companies alike.

David C. Wyld is the Mayfield professor of management and director of the Strategic e-Government Initiative at Southeastern Louisiana University.

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