President _____ To Face Jobs Challenge
By George Anderson
No matter who wins the election tomorrow, the next President of the United States may find that structural changes in the economy and the realities of the federal budget make it neigh near impossible to create a major surge in new job growth.
According to a variety of business leaders and economists interviewed for an article written for the Bloomberg News Service, productivity gains achieved through advancements in technology, near record low interest rates and the end of the stimulus achieved through the Bush administration’s tax cuts offers little hope that companies will be adding large numbers of new employees to their payrolls.
“I think caution is a watchword today,” said Jeffrey Noddle, chief executive of Supervalu. “People are not going to add employment until they are very certain that there is growth in their business or in their industry or in their sector of the economy.”
While new job growth has been running in the range of 100,000 to 150,000 a month, most economists believe that it will take at least 200,000 to keep pace as new workers come into the market.
Regardless of who sits in the Oval Office, many believe the President has little real ability to create a demand for new hires in the private sector.
James Glassman, senior U.S. economist for JP Morgan Securities isn’t one of those.
“The economy has picked up and has enough momentum that it will regain speed on its own,” he said. “If it doesn’t and productivity has changed, then policy makers will just work harder to clear the bar.”
Peter Peterson, chairman of Blackstone Group LP and U.S. commerce secretary under Richard Nixon thinks that the biggest thing the next President can do to stimulate job growth is to get the federal budget deficit under control.
“What Robert Rubin (Treasury Secretary under Bill Clinton) did is confront deficits early in the term, which is essential, and restrained spending,” he said. That “shows investors and foreigners that you have fiscal affairs under control and that in turn produces greater confidence, investment and jobs.”
Moderator’s Comment: What do you believe will be the major economic challenge for the next President of the United
States? How will this issue and the federal government’s handling of it affect retailers?
Two words health care. That’s something that even Lee Scott and the United Food and Commercial Workers can agree on. –
George Anderson – Moderator