Big hurdles to job creation remain

President Barack Obama delivers a speech on jobs and strengthening the economy during a Labor Day event sponsored by the Metro Detroit Central Labor Council in Detroit, Mich.

Columbia Green CEO Vanessa Keitges.

Brittany Reichard, Columbia Green's newest employee.

Chandra Brown, vice president of Oregon Iron Works.

JEREMY HOBSON: President Obama spent Labor Day
in Detroit, where he gave union workers
a little preview of Thursday's big jobs speech. He said it's time to see if Congressional
Republicans will "put country before party" when it comes to creating jobs.

BARACK OBAMA:There is work to be done and there are workers ready to do it. Labor is on board, business is on board, we just need Congress to get on board. Let's put America back to work.

I guess we'll see how that line of attack works later this week. But here's one thing we do know for sure -- lackluster or nonexistent job creation
like we saw in the government report last Friday can itself keep the economy down. Persistent high unemployment saps consumer confidence and spending; it spurs home foreclosures; it makes businesses less willing to invest and expand.

As we continue our coverage of "The Breakdown:
Our Economy One Step at a Time," Marketplace's Mitchell Hartman has this report on job creation and getting America back to work.

MITCHELL HARTMAN: Imagine a new reality show -- it's called "Hey, America, Get a Job," and it has this edgy-yet-upbeat music. And here's our first contestant.

BRITTANY REICHARD: My name is Brittany Reichard. I'm 22, I live in Oregon and I've got a job.

Brittany is one of the winners! And now she talks about the long odds she faced, and how consistent persistence helped her land an entry-level marketing job in her field -- environmental science.

REICHARD: The adults in the job industry are staying in their jobs longer. Young people coming out of college don't have a place to really fit in. And so it's just kind of keeping your arms open and trying to reach whatever you can out in the job market.

Her employer, meanwhile, could be a winner on reality TV, too. The company, called Columbia Green, has been growing by leaps and bounds. It's a roofing manufacturer that installs plants and soil on top of commercial buildings to filter storm-water. The green roofs can save building owners a lot of money on waste water disposal and energy.

Vanessa Keitges bought the business two years ago.

VANESSA KEITGES: Our products went national, and most recently international with Canada, Europe and New Zealand.

Keitges expects revenues to hit $3 million this year, and $15 million by 2013. She'll double the office staff to 12 next year.

But this reality show celebrating job creation -- well, it may not have a very long run. Because as much as we cheer for the few companies that are growing, it's not enough -- not nearly enough.

WILLIAM DUNKELBERG: Actually, I don't think we've seen any decent jobs growth since the recovery allegedly started back in June of '09.

William Dunkelberg is chief economist at the National Federation of Independent Business.

DUNKELBERG: Just to keep up with population growth, you need about 125,000 net new jobs every month. Then if you want to re-employ the eight million people that we fired during the recession, we need well over 300,000 jobs.

That's every month, for at least the next three years. Recently, we've been adding just 70,000 jobs a month. While health care, hospitality and manufacturing have been hiring, everything connected to housing -- from construction to real estate -- has been stuck in the mud.

Still, with corporate profits up and companies sitting on piles of cash, why aren't they using some of that to hire up? Dunkelberg says it's a simple matter of not enough demand in the economy for goods and services, especially from consumers.

DUNKELBERG: The problem with the weak consumer spending that we have is that the likelihood of a new employee being able to generate enough additional value to the company -- sales, or whatever -- is pretty low, so there's no good reason to hire.

And so many reasons not to hire. I caught up with David Allison at the factory he owns in suburban Chicago. Jet Finishers has about 50 employees and does industrial coating for tractors, military vehicles and consumer electronics. Allison laid off a third of his workers in 2009. Since then, business is up, and the factory's humming, but --

DAVID ALLISON: The people we have hired when we've needed extra hands, we've brought them from a staffing agency, because we're just loathe to bring anyone on permanently.

What would make you think twice about what you just said?

ALLISON: You know, that's tough, I've been thinking about this myself. It really comes down to how I feel about the future. We did hire a couple of people, we did make that decision, and I ended up letting one of them go again. What would have to happen is, we'd have to see some sense that the growth is permanent, not just a temporary blip.

There's no shortage of ideas for pushing business owners like Allison off the fence and into hiring mode. Many in the business community support a payroll tax cut for employers, for instance. That would shave a bit off the cost of adding workers to your payroll.

ALLISON: I don't think a few percentage points one way or the other on a payroll tax is going to make any difference.

An employer tax cut would also add to U.S. government debt. Cheaper ideas include boosting exports -- which are already a bright spot for the U.S. economy. President Obama says ratification of free-trade agreements would create jobs in the manufacturing and service sectors.

Another proposal: give immigrant entrepreneurs a "start up visa" to settle here if they create jobs. Many Democrats are calling for another round of spending on roads, bridges, schools. That would mean paychecks for laid-off construction workers, and, most likely, a bigger deficit.

Stimulus dollars have kept the 400 union workers at Oregon Iron Works, outside Portland, busy right through the recession, cranking out massive bridge fittings, boats and streetcars. As that funding runs out, company vice president Chandra Brown worries about a drop-off in business. At all costs, she wants to avoid layoffs.

CHANDRA BROWN: So I tell you what, even in the downtown, we are going to keep our best people. That's our number one responsibility is to keep our currently fantastically trained welders and fitters, machine shop -- that you can't even find anymore.

It's unlikely any of the ideas now being floated would generate the 300,000 jobs we need every month to dig out of the unemployment hole. And with the economy actually slowing down, the best hope may simply be that companies don't start downsizing yet again.

I'm Mitchell Hartman for Marketplace.

About the author

Mitchell Hartman is the senior reporter for Marketplace’s Entrepreneurship Desk and also covers employment.

Columbia Green CEO Vanessa Keitges.

Brittany Reichard, Columbia Green's newest employee.

Chandra Brown, vice president of Oregon Iron Works.

Log in to post2 Comments

How about scrapping many, if not most, government regulations? Taxes are the *least part* of the expense of doing business and of hiring and retaining new workers. And we should also repeal Obama's health care law that's set to mostly go into effect next year; its essential provisions are primarily in effect massive tax increases.

Great post about why this country is in this economic crisis:

" How is College going to pay off if all foreign workers with their work visas are taking most if not all the jobs of US Citizens and legal residents!!! Do Universities care about this, NO!! will they ever care? probably not, otherwise Corporations and Colleges profits will decrease in the short term. All Universities care about is: enrolling as much students as they can to increase their profits, even if Colleges have to lie to students of the reality of what really happens after graduation, and the job market. It does not matter what gets in the way of these for profit educational Corps, ultimately they don't care if students find jobs or not!
Also most Universities and Colleges get $ full tuition paid from foreign workers/students = more $$. In other words is a cycle of corruption:

These paragraphs caught my attention as well:

Obama or whoever wants to be US President: their plans of creating new jobs must include to take back all the jobs which were replaced by foreign workers who are still unemployed. Many of them were asked to train their replacements before loosing jobs. They need to address the misuse and fraud of foreign work visas such as: H1b, H2b, L1 visa. Thanks to the US Govt, which created these work visas: these US Jobs are given to foreign workers (most times unqualified) allowing US companies to hire this group of people instead of qualified US legal residents and citizens causing our unemployment rate to continue to increase on a daily basis! For creating infrastructure we have best brains and best educational centers and must utilize our work source.
If people want the economy to get better, people should vote for those who are really working for the interest of the American people and not for the lobbyist and corporations who import workers to fill jobs and outsource jobs and technology for greed, increase their profits no matter what gets in their way, keep shareholders happy, and pay Top executives as much as possible.

Good examples of this sad and unfair reality are the movies: The Company Men (2010) and parts of Wall Street: Money Never Sleeps (2010)

This is the current reality of the job market in the USA:

Top 100 H1B Visa Sponsors -2011 H1B Visa Report:

Rank H1B Visa Sponsor H1B Visa Petitions Average Salary
1 Microsoft 2,505 $96,497
2 IBM 1,263 $80,908
11 Intel 404 $95,714
14 Oracle 376 $104,080
16 Google 355 $103,129
17 Hewlett Packard 340 $99,344
21 Yahoo 308 $105,112
26 Amazon com 255 $99,459
27 Motorola 249 $95,861
45 Apple 175 $110,987
47 Cisco Systems 169 $117,662
84 SAP America 102 $105,498
91 PayPal 98 $105,008
185 AT&T 91 Sign In
3 Facebook 86 Sign In

These companies don't give a s* if mergers cause mass layoffs, higher prices for consumers, or if thousands of US legal families are having a hard time (thanks to their "hiring practices"), America's Unemployment Rate, new graduates unemployment rate etc..

*** Important *** Please see link below about an important Bill Congress is planning to pass. Your support on this is imperative for everyone who has been affected / displaced by people with foreign work visas, H1B visas, or the unemployed, or the ones who do not have a solid full-time employment history in their resume.

Please take action, vote and share your comments at: "

With Generous Support From...