The question of how to create new jobs is a perennial debate, and the answer is far more complicated than we’d like. The CAP plan points to some important challenges that many workers face. These include lack of a college degree, being a minority, and being an ex-offender. But what kinds of jobs should be created and why? This article explores some of the options for creating new jobs.
While POE jobs offer a promising solution to joblessness, they should be limited to a small number of sectors. While youth employment programs can be scaled up, they still need to target a population that society is willing to fill with work. Pollack (2017) surveys evidence from youth job creation programs and finds promising results, but raises legitimate concerns over the quality of implementation. Ultimately, there is no perfect solution to create jobs.
Despite the challenges of structural unemployment, the goal of macroeconomic full employment is still important. Public policy can help distribute national full employment throughout communities by tackling structural and frictional unemployment. If a region is fully employed, it likely means that other regions are under or over-filled, and distributing aggregate demand across different regions could yield significant welfare gains. However, the question of whether government policies are necessary is also complex.
The number of workers who need to switch occupations has been the highest. If automation and technology are adopted at an accelerated rate, China’s workforce may double to 100 million. This is a small number compared to the hundreds of millions of Chinese who have migrated away from agriculture in the last 25 years. The amount of workers who may need to change occupations and learn new skills is significantly higher in advanced economies, including the U.S. and Germany.