For many Americans, the proverbial lump of coal under the Christmas tree is beginning to sound pretty good. It implies you have a roof over your head. And if you also have a fireplace, that coal can come in useful on a chilly December night.
But to keep a home you need a job, and the most recent jobs report indicates unemployment is still, for most Americans, an unacceptably high 8.6% -- despite a slight improvement in November. America's middle class is eroding at a time when corporate profits are at record levels, as President Obama noted in an interview on 60 Minutes a few weeks ago.
"What's happened to the American deal that says... we are focused on building a strong middle class?" asked President Obama in the same interview, contending so rightly the country needs "a broad-based middle class, where everybody is able to do their part and everybody's able to succeed."
Our inability to succeed is evident in recent U.S. Census Bureau figures reporting median household incomes fell last year to 1996 levels, and the number of Americans living below the official poverty line, 46.2 million in September of this year, is the highest number in the bureau's 52 year history.
Americans now struggle with the same challenges faced by others around the globe. Unemployment is at its highest level since 1996 in the U.K. (8.3 %), and has skyrocketed these past few years in Greece (18.3 %), Ireland (14.3 %), Portugal (12.9%) and Spain (22.5%).
America invented the middle class dream, and the world watched and learned. And it's time for America to lead the way again. We know, and the McKinsey Global Institute has recently issued a report confirming, "recoveries are increasingly becoming 'jobless' due to firm restructuring, skill and geographic mismatches between workers and jobs, and sharp decline in new start-ups."
Here, and abroad, government needs to collaborate with established businesses and entrepreneurs to create industries that produce jobs that are relevant and specific to their own country's economy.
In Germany, where unemployment is currently 5.5%, new government policies in the mid-noughties created temporary jobs, called mini-jobs, that allow companies to bring in workers and let them go as demand for their products and services rise and fall. Previous government policies made it impossible for employers to have this kind of flexibility, and stifled growth. Though mini-jobs have a cap on monthly wages, they can lead to a full-time regular job. Also, workers don't pay taxes on these earnings and are still eligible for some government assistance.
In South Korea, where the jobless rate was 3.1% in November, a non-governmental panel chaired by an ex-prime minister identifies business areas for growth, and these findings are used as the underpinning criterion for formulating government job creation policies. The tactic has allowed South Korea's job market to show resilience despite the deepening debt crisis in Europe and slowing global growth.
According to data on Bloomberg.com last week, as jobs in the agricultural, fishery and forestry industries declined 0.7 percent, the number employed in the electricity, transportation, telecommunication and finance industries rose 5.7 percent; the health and welfare service sector added 113,000 jobs; and wholesalers and retailers added 109,000 jobs in November from a year ago. And government plans to create more jobs in the public sector to support the job market as the expected economic slowdown dampens hiring at private companies.
Even in Saudi Arabia, an absolute monarchy, there are lessons to be learned on job policy, points out investorsinsight.com. Foreign workers make up one-forth of the total working population -- a much lower percentage than in neighboring Kuwait, Qatar and the United Arab Emirates. But with an official jobless rate of 10.8%, and unofficial estimates that put unemployment as high as 25% even excluding women, the government realizes that this pattern is unsustainable. So the country has just introduced an ambitious new "Saudization" drive to replace expatriate workers with Saudi citizens, complete with punitive actions for companies that do not comply. At the same time, the Saudi Arabian General Investment Authority is spending $200 billion to create new economic opportunities, especially in less developed urban areas.
A very different effort that is creating jobs in Pakistan is the result of innovative efforts by my own company, Tetra Pak, to improve milk production in the country through Dairy Hubs, which are processing centers that apply a 'one herd' model to about 20 villages in close geographic proximity at a time. Each hub amalgamates about 800 to 1000 farmers, with up to 10,000 cows, into a single entity; collects milk daily; and pays the farmers in a timely manner, providing them with a reliable living wage. And in addition to the processing facility, we also provide the farmers with education and training on breeding and feeding, and supply vaccinations and feed for the cows.
In effect, Tetra Pak is teaming with local entrepreneurs to restructure an industry, and match workers with geographies and available jobs. As farmers earn consistent wages, they realize that they can raise their earnings by increasing their herds, which many do. So ultimately the process creates jobs and generates more tax revenue for the government.
Dairy hubs have been so successful since Tetra Pak started them in 2009 that we have expanded the program to Bangladesh, and are exploring how the concept can be introduced in Asia, Sub-Sahara Africa and Central and South America.
So what can be done in here, where the U.S. Chamber of Commerce points out the need to create jobs for 25 million Americans who are facing unemployment -- as well as another 21 or so million future jobs the McKinsey Global Institute estimates the country will need by 2020? A six-point plan the Chamber developed this past fall detailed measures Congress and the administration can take right now to spur private sector growth.
The points are broad: expand trade and global commerce; produce more American energy; speed up infrastructure projects; welcome tourists and business visitors to the U.S.; speed up permits and provide regulatory certainty and relief; and pass tax incentives that create jobs while increasing revenues. Yet each one contains a number of salient measures that are doable right now. These measures focus on industries that can create real, long-term, economic expansion, which history teaches us leads to sustainable job creation.
Congress and the administration keep saying that creating jobs is the nation's highest priority. It's a priority that will require the U.S. to reform education systems, health care, capital markets, legal structures and more. It's a huge and unending undertaking. But the American dream needs to be rekindled, and this can only be done through careful and intense partnerships with our business community. This is where the sustainable jobs are -- and most of these new jobs are coming, and will come, from both the genius of American entrepreneurs and intrapreneurs as they innovate for our future.
The best Christmas gift for many Americans is simply a job. But an even better one would be for America to get its act together and to reinvent the American Dream. I have great faith America can do this. Let's see how far we can get in a year.