We tend to think of the jobs economy in terms of jobs lost at the likes of GM and jobs added at the likes of Google. And thinking in such a manner is misleading, and downright dangerous.
The fact is that the American economy in particular is an economy of churn—always adding and subtracting jobs at an incredible rate. Forbes (16 November) presents some stunning statistics:
Between September 2008 and September 2009 we lost about 6 million jobs. That’s a crushing blow no matter how you look at it. But if you think that the likes of propping up staggering giants such as GM is the answer, think again.
Question: How do you (we!) arrive at a loss of 6 million jobs?
We added—yes, I said ADDED—51 million jobs.
And we lost 57 million jobs.
That is, bizarre as it may seem, in the space of a year there was a churn of over ONE HUNDRED MILLION jobs. (Micro-tizing the math, we didn’t “lose a job”—on average, we created 8 jobs and lost 9 jobs for a net of minus 1—and repeated that musical chairs drill enough times to end up 6 million in the hole.)
And this is how it always goes, though typically, thank God, the pluses exceed the minuses.
While the above offers not a smidgeon of relief to jobless Jane or Joe next door, there is long-term good news imbedded in Joseph Schumpeter put it. Put simply, we “do” churn, painful though the constant dislocations may be, better than anybody else—i.e., our labor markets are the least sticky outside the likes of India or China. I lived with astoundingly productive mega-churn for over three decades in Silicon Valley. It isn’t pretty—but over the long haul it works, and works a helluva lot better than government-based bets on particular big companies.
There is a four-letter word for depending on big companies and incentives aimed at big companies to pull our irons out of the fire. Namely … dumb.
(NB: I apparently coined the term “Brand You.” And my pal and our Cool Friend Dan Pink gave us “Free Agent Nation.” Never have these ideas been of such profound importance. The issue of Forbes cited above refers to a 2006 Government Accountability Office study that estimates that, hold onto your hat, 30 percent of all U.S. workers are free-lancers or part-timers who are not pocketed into any of the Bureau of Labor Statistics worker stats categories. Unreported annual income from the “informal” economy may be as high as $2.3 TRILLION.)