Michael Kim landed his job as HomeAway expands to meet growing demand for its online house-rental service.
Later this year, a marketing manager will sit down for his first day of work at HomeAway, a company that helps people rent their vacation homes online. In the firm's sleek Austin, Texas, headquarters, a glass-wrapped building decorated with travel souvenirs, the marketer will flip on his computer and do his job--a job no one has done before. This, you see, will be a brand-new job, one of the most coveted commodities of economic recovery.
How this job will come to exist is at the heart of the most pressing problem in the economy today. Since the start of the recession in December 2007, the U.S. has shed 8.4 million more jobs than it has gained. The unemployment rate hovers near 10%, and broader measures of labor-market woes that include underutilized workers are as high as 16.8%. Go down the nation's list of economic problems--from mortgage defaults to state-budget shortfalls--and joblessness lurks in the background.
Even as other economic signals have started to turn positive, the jobs situation has remained bleak. In February, the economy lost a net 36,000 jobs, which is leagues better than the 726,000 lost in February a year earlier but points in the wrong direction all the same. Were the economy to magically start generating jobs at a healthy clip--say, 200,000 a month--it would still take 3½ years to return to where we were, never mind the jobs we need for new entrants to the workforce.
This reality has triggered a nearly convulsive political response, given that elections are won and lost over the state of the economy and the mind-set of wage earners. That's why President Barack Obama, in his State of the Union address, called jobs his "No. 1 focus" and proposed repurposing bank-bailout money to lend more to small businesses, which would then, presumably, generate jobs. On March 17, Congress passed a job-creation bill that includes, among other things, an estimated $13 billion worth of tax incentives to coax companies into adding to their payrolls.
The cold truth of the matter, though, is that there's not much Washington can do to gin up permanent jobs on such short notice. The federal government is a key player in engendering job growth in the long term--by establishing smart policy in areas such as trade, education, immigration, health care, energy, infrastructure and taxes--but over the course of months or even a few years, there's little it can effectively do besides hiring directly or stepping in as a buyer of goods and services.