With last week’s Republican National Convention in Tampa wrapped and the Democratic National Convention in Charlotte going on this week, the debate over job creation is heating up across the U.S. Adding fuel to the fire is the uneven progress of job recovery in election swing states. According to a recent USA Today article, employment in six of these states — Virginia, Pennsylvania, Iowa, Colorado, New Hampshire and Ohio — are close to catching up to their pre-Recession levels, while six others — North Carolina, New Mexico, Wisconsin, Michigan, Florida and Nevada — are still trailing theirs.
At least half of all states have recovered a third or fewer of their lost jobs, but it will be 2013 before most of them are projected to return to peak employment and even later before full recovery kicks in for everyone else. By then, the presidential election will be over. So it’s likely the candidate with the most believable, feasible plan for sustaining these jobs and creating more of them will be the person who wins.
The slow but steady trend of reshoring is becoming part of the rhetoric, as politicians grapple with strategies for keeping manufacturing in the U.S. — and bringing it back. But despite the auto rebound in the Rust Belt earlier this year, unemployment still remains high in manufacturing-heavy states across the Midwest.
Missing from the political debate so far is acknowledgment of the “new normal” — or the fact we are living in a time of slower growth, higher unemployment and less upward mobility, especially among the working class, economist Joel Kotkin writes in a recent NewGeography post.
Energy, Agriculture Powering Growth
Candidates should focus on replicating the success of states that have returned to their peak employment levels or are already exceeding them, Kotkin asserts. What is driving growth in these states? High-in-demand commodities. Oil-producing strongholds like North Dakota, Louisiana, Alaska and Texas are leading the recovery, and energy and agricultural breadbasket states like Oklahoma, Nebraska and South Dakota are pulling ahead, thanks to the global surge in food and fuel prices.
A natural gas drilling boom in Pennsylvania’s Marcellus Shale is fueling record job growth near the Ohio-Pennsylvania border, an area that has been economically depressed since its steel mills shut down. Not only has the energy industry doubled there, but it’s also creating jobs for everyone from manufacturers making the pipes that transport the gas to electricity producers and chemical manufacturers to labs testing gas well drilling waste for oil and gas companies to restaurants and hotels feeding and housing the influx of drillers.
Natural gas exploration may be driving prosperity in this corner of the Rust Belt, but local leaders are working to sustain it by positioning the region as part of an emerging tech belt and encouraging innovation in advanced manufacturing and technology sectors. Utah and Colorado have also launched modest comebacks by combining natural gas gains with high-tech investment.
With much of the Southeast capturing the auto production market right now due to its low costs and cheap labor, the Rust Belt states that are creating jobs are diversifying their industrial bases. Ohio has evolved the best. Cleveland has helped boost the state’s economy with its biomedical cluster, and the former tire capital of Akron, now home to a new biomedical corridor, is using its expertise in materials science to build a thriving market for medical device manufacturing.
Innovation and the “New Normal”
Living in the “new normal” means that innovation is more crucial than ever, not just in manufacturing but across all industries. Attracting and developing high-tech companies that hire highly skilled employees is one of the best ways to create more jobs for the working class because of its trickle down effect — a phenomena documented by Brookings Institution research. As Kotkin points out in his recent post:
The stories of the successful states tell us the key to success lies in promoting basic industries like energy, agriculture and manufacturing — which then create business service and high-skilled jobs — combined with a broad agenda favorable to entrepreneurs of all kinds.
Are candidates focusing on innovation enough in the job creation debate? What should they be talking about more in regards to the economy? Please share your thoughts below!