President Trump’s New Economy Challenge (Part 2 of 20). According the White House website, “To get the economy back on track, President Trump has outlined a bold plan to create 25 million new American jobs in the next decade and return to 4 percent annual economic growth….that starts with pro-growth tax reform to help American workers and businesses keep more of their hard-earned dollars.” While the business acumen of President Trump and his Cabinet gives Jobenomics a sense of optimism, Jobenomics and the millions of followers in the Jobenomics National Grassroots Movement eagerly await evidence that the Trump team can fulfill their economic and job creation objectives. We also pray that the American public will unite with President Trump’s vision of “Bringing Back Jobs and Growth.”
The Trump economic and job creation plan proposes sweeping reforms in tax, regulatory policies, trade, energy and infrastructure. Jobenomics believes that these reforms are necessary.
- President Trump’s Pro-Growth Tax Plan proposes to give every income group tax cuts. These cuts will result in a million more citizens being removed from income tax rolls and low-income Americans paying no income tax at all. More discretionary income can boost America’s consumption-based economy. In addition, tax cuts will be especially valuable to small business owners that are unable to take advantage of corporate tax breaks utilized by big business.
- President Trump’s moratorium on Reducing Regulation and Controlling Regulatory Costs will reduce burdensome job-killing restrictions on businesses large and small, which will grow the economy and produce jobs.
- President Trump’s America-First Trade Policy is also a step in the right direction. Jobenomics wrote about “reciprocal trade” in its first book stating that there is nothing free about “free trade” and endorsed the notion of “reciprocal trade.”
- President Trump’s Unleash American Energy Plan can make America energy independent and create millions of new jobs in an environmentally-friendly or environment-neutral way. The 160-page Jobenomics Energy Technology Revolution (ETR) Plan explores in depth the entire spectrum of energy technologies, systems and services in regard to business creation, job creation and climate change. Jobenomics asserts that over 10 million net new energy jobs will be created if America: (1) engineers a better balance between centralized grid and point-of-use power generation systems, (2) exploits the full range and capabilities of renewables from solar, wind, hydro, biomass, geothermal to waste-to-energy, (3) creates cleaner fossil fuels and exploits advances in nuclear technology, (4) pursues advanced energy services, (5) accelerates development and implementation of advanced vehicles, alternative fuels and advanced storage systems, (6) promotes net-zero buildings and communities and (7) invests in next generation, exotic and yet unknown energy technologies. These areas will be addressed in detail in a future blog ETR series.
- Jobenomics is a strong advocate of big business, the anchor tenant of the U.S. economy, and believes that a robust industrial base is paramount to American prosperity and security. Consequently, Jobenomics supports the President’s Memorandum Streamlining Permitting and Reducing Regulatory Burdens for Domestic Manufacturing to stop the capricious hemorrhaging of U.S. manufacturing to foreign countries.
The following examples are some of the perceived differences between the Administration’s Plan and the Jobenomics Plan, which is based on six books worth of research and thousands of meetings with community leaders, business executives and government officials on economic, business and job creation.
- The Trump Administration’s plan presents a top-down approach, whereas Jobenomics offers a bottom-up approach. The Trump Administration, replete with corporate executives and senior policy-makers, naturally will exhibit a default position oriented to big business and government solutions; whereas Jobenomics believes that the American economic engine is driven by small business owners who employ 78% of all citizens and produced 74% of all net new jobs this decade. Consequently, the Jobenomics approach emphasizes mass-production of highly-scalable small and self-employed businesses focused on demographics with the greatest potential and need at the base of America’s socioeconomic pyramid with priority given to women, minorities, new workforce entrants, and the large cadre of financially distressed citizens who want to work or start a business.
- As compared to the known Trump plan, Jobenomics places a much greater emphasis on welfare to workfare incentives to mitigate voluntary labor force departures by American adults who are capable of working but chose alternative lifestyles of public/familial assistance, the underground economy or illicit behavior, and developing viable career paths for the ever growing contingent workforce that will soon represent over 50% of the U.S. labor force.
- Jobenomics focuses on producing businesses and jobs related to the fast-growing digital economy, whereas the new Administration seems focused on the slower-growing traditional economy. Based on ongoing lackluster GDP growth, the traditional economy is advancing at a sclerotic 2% annual rate. The digital economy is accelerating at a rate between 15% and 20% annually. From a Jobenomics perspective there are at least seven unique but intertwined economic communities within the emerging digital economy: the E/M (electronic/mobile) Economy, Sharing Economy, App/Bot/AI (artificial intelligence) Economy, Platform Economy, Gig/Contingent Workforce Economy, Data-Driven Economy and Internet of Things (IoT) Economy. All of these digital communities must be integral to President Trump’s vision of “Making America Great Again.”
Industry Employment Growth This Decade (2010s)
- Jobenomics emphasizes creating businesses and jobs in the fastest growing industries in the service-providing sector, whereas the new Administration emphasis has been on slower growth goods-producing industries, namely manufacturing and construction. Seven S. private sector service-providing industries now employ 103 million Americans as opposed to only 20 million in three private sector goods-producing industries (Manufacturing, Construction and Mining/Logging). 88.2% of all new jobs this decade were created by service-providing industries and only 11.8% by goods-producing industries. 81.5% of all new jobs were produced by the four leading service-providing industries: Professional & Business Services; Education & Health Services; Trade, Transportation & Utilities; and Leisure & Hospitality. Manufacturing and Construction contributed only 5.1% and 6.6%, respectively.
- The American public should not be encouraged to expect a significant number of net new jobs from manufacturing in the next decade due to automation of routine manual and cognitive tasks, outsourcing and increased usage of contingent (part-time and independent) workers. The industrial age is following the same path as the agricultural age. Less than a century ago, the vast majority of Americans worked on a farm or ranch. Today, it is about 2%. In 1960, U.S. manufacturing employed 28% of U.S. nonfarm workers. Today, manufacturing employs only 8% of U.S. nonfarm workers. The U.S. Bureau of Labor Statistics Employment Projections 2014-2024 Report, projects manufacturing losses of 814,000 jobs over the next decade. Manufacturing currently employs 12,275,000 people. If the BLS projection is accurate, manufacturing employment will decline to 11,461,000, which is below the historical post-WWII manufacturing low of 11,992,000 jobs in February 1946. If President Trump is successful in convincing 100 major companies to maintain or reshore 5,000 jobs each (as he did with Carrier), that would only equate to 500,000 jobs, an essential endeavor but insufficient in terms of employment growth.
From a wage perspective, manufacturing is no longer the high paying industry sector that it used to be, nor will it be in the future. According to the U.S. Berkeley Labor Center, contrary to public perception that manufacturing jobs are “good jobs”, manufacturing wages now rank in the bottom half of all jobs in the United States and are not even keeping up with inflation. In the largest segment of the American manufacturing base, automotive manufacturing, wages have declined further, falling three times faster than manufacturing as a whole and nine times faster than all occupations.
The reason for the decline in manufacturing jobs and wage is not only due to overseas outsourcing but rather to technology. Automation of routine manual factory floor skills has been underway for several decades. Over the next decade, automation of routine cognitive skills will be next via smart systems, sophisticated algorithms and artificial intelligence agents. Technology will not only enable machines to replace humans, but dissect full-time jobs into multiple part-time jobs and then further segment work into disparate tasks for contingent workers, who will increasingly displace traditional full-time workers.
- President Trump’s Infrastructure Plan states that it will create a million new jobs when enacted by Congress. The U.S. transportation infrastructure certainly needs an upgrade. However, with the exception of cyber security, little has been said or published regarding President Trump’s position on digital infrastructure, the emerging digital economy or implementing a National Broadband Plan. High-speed broadband connections to 100% of America’s homes and businesses could create at least ten million U.S. jobs according to the 200-page Jobenomics Network Technology Revolution (NTR) Plan. The Jobenomics NTR plan evaluates a “perfect storm” of over three dozen brilliantly creative and creatively destructive NTR technologies that will transform societies, nations, businesses and labor forces. Globally, the NTR has the ability to simultaneously create or replace hundreds of millions jobs in the next decade. A robust digital infrastructure will put America on a firm footing to compete for our fair share of new jobs and mitigate loss of traditional jobs.
- While recent labor force gains have been positive, negative employment trends threaten to upend the Trump Administration’s economic and job creation plan. Six negative trends threaten economic growth and stability. These trends include voluntary workforce departures, contingent workforce expansion, sclerotic GDP growth, population/workforce imbalance, low wages/income and declining business startups. Each of these negatives will be addressed in detail in later postings in this blog series. All need to be addressed by the incoming Administration.
In conclusion, small business and job creation is the number one issue facing the U.S. in regard to economic growth, sustainment and prosperity. Jobs do not create jobs, businesses do. The vast majority of jobs are produced by small and micro businesses. Having a businessman President and Cabinet full of business professionals gives Jobenomics a sense of assurance that the Trump Administration will be amenable to new business and job creation strategies, especially those with an emphasis on demographics with highest potential and need at the base of the American socioeconomic pyramid.
Stay tuned for the next installment in the President Trump’s New Economy Challenge series entitled, “The Nexus between Jobs and GDP” scheduled for release on 15 February 2017.
About Jobenomics: Jobenomics deals with economics of business and job creation. The non-partisan Jobenomics National Grassroots Movement’s goal is to facilitate an environment that will create 20 million net new middle-class U.S. jobs within a decade. The Movement has a following of an estimated 20 million people. The Jobenomics website contains numerous books and material on how to mass-produce small business and jobs. Monthly website traffic exceeds one-half million hits, which is indicative of the high level of public interest regarding economic, business, labor force and workfare solutions. For more information, see Jobenomics Overview and the Author’s Biography.