For 25 of the past 27 months, the unemployment rate in the U.S. has topped 9 percent. That easily surpasses an 18-month stretch in 1982–83 as the worst streak of joblessness since the end of World War II.
For some reason [the 2012 elections, perhaps?], the issue seems to be gaining traction in public-policy circles:
• Earlier this month, President Obama heralded the next attempt to prime the employment pump, announcing a $447 billion program that included hiring incentives and business tax cuts that would be paid largely with tax increases—on those who own the businesses that might create more jobs.
• Gov. Jay Nixon summoned the Missouri General Assembly back to special session on Sept. 6, pushing his Made in Missouri proposal containing business incentives and legislation to create a fund for life-sciences and technology companies that could be job generators.
• Even Kansas City Mayor Sly James is in on the act, announcing a collaboration with a New York-based program focusing on efforts to promote paid internships for young adults through age 24 who are neither working nor in school.
Those initiatives, which area business figures note are laudable in their intent, have one thing in common: They’re all coming on the public side. Nearly three years after employment numbers began tanking, and after hundreds of billions have been spent to reverse that, perhaps not all of the answers need to be coming from the halls of government, some say.
“The private side will have to address it,” said Dick Bond, the long-time Kansas state senator and policy insider in Johnson County. “It would be nice if the private sector did not have impediments put in its way by a bad regulatory environment.”
One of the ways that private-side interests can attack the problem regionally, he said, would be through greater emphasis on developing the region’s burgeoning life-science sector. More than a decade in the making, it has grown to produce hundreds of small start-up companies. And those kinds of enterprises, as the Kauffman Foundation has noted, are most responsible not just for rapid job creation, but generation of almost all net new jobs in recent decades.
Can we go back to that well for more?
“I think the opportunity is so great in that area,” Bond said. “We have aligned a number of the resources to do some great things in the life sciences here in this region, and we’re just starting. I’m excited about what can be done, especially in the area of drug development with the Stowers Institute, with KU Med likely to get National Cancer Institute designation, with the KU pharmacy school, one of the top schools in the nation.
“All of that tells you that we can bring research from the bench to the bed, which means lots of jobs and developing new drugs for the world.”
Dan Getman, who sits a little closer to the action as president of the Kansas City Area Life Sciences Institute, says the region may have more going on that many people may appreciate. He ticks off a healthy list of such large-scale initiatives as the $650 million National Bio and Agro-Defense Facility planned for Manhattan, Kan., KU’s looming application for national cancer institute designation, ground-breaking developments in life-sciences venture capitalization, research work at Children’s Mercy Hospital, KU’s Institute for Advancing Medical Innovation and Saint Luke’s Health System, plus broad advances in the animal-health corridor.
“I think we are doing a tremendous amount in life sciences and making lot of progress in a lot of different areas, and yet it always takes effort to sustain that,” Getman said. Evidence of progress, he said, was the decision by MPM Capital, a high-level venture-capital firm, to open a Midwest office in Kansas City. “What top venture-capital firms bring to the region isn’t just capital, they bring the expertise in recruiting top people to start and run companies,” Getman said. “As a region, we’ve got to support organizations like these.”
He said KCALSI was trying to address the other half of the jobs equation, as well, with its surveys of companies about the kinds of workers they expect to need. Those findings are relayed to area universities and community colleges, where officials are drawing up changes in curriculum in response. “Right now, we have a good match between the needs and what’s coming up, but can always improve that,” Getman said. “We can make people specifically prepared for certain jobs, rather than with just general education. If the region is going to continue to grow in life sciences, it will have to be through a combination of new people coming in, plus hiring out of regional institutions.”
Beyond the life sciences, says Pete Fullerton of the Platte County Economic Development Council, regional job creation hinges on two factors: addressing the uncertainty factor on the policy side, and doing more as a region to snap ourselves out of the funk.
“One of the real challenges in the last few years is that uncertainty,” he said. “There are things the public sector can address relative to that, like issuing permits on time, having the bureaucracy streamlined to the point that businesses know that A means A.
“What I’ve seen in the last couple of years is people and businesses, hoarding cash. A lot of businesses have done well, there is
a lot of money sitting on sidelines, but business owners are not sure what is real and what is fake.”
Between health-care reform and new regulatory burdens, business owners don’t know the true cost of a job in this environment: “What is it truly going to cost me to hire, to invest capital, to put money into my facility?” Fullerton said. “That’s the deal; it has nothing to do with a tax credit on hiring somebody who’s been unemployed for a certain amount of time. I hear businessmen say, ‘I don’t hire for a tax credit, I hire to make money and do business.’”
The bottom line, he said, is that capital will go where it’s wanted. “It might be a corporation investing in a facility, or investing in its people, but it will go to a place where it is appreciated and where it is welcome, not where it will get beat up.”
When it comes to public-policy prodding, though, Bond isn’t overly optimistic that we’ll see significant results.
“There is not a magic bullet, and both parties are screaming at each other, not doing anything. They’re both equally to blame, several presidents are to blame and the Congress is really just in a stalemate of political antagonism. Cooperation, collegiality, compromise—those are words left to history.”
Which may just make it all the more imperative for local action to address the regional jobs front with regional answers. “In Congress, and, it’s growing as well in state legislatures, there’s such a chasm between parties,” said Bond, a 14-year veteran of the Kansas Senate. “I don’t know whether anybody can reach across and say ‘Let’s accomplish something.’”
And yet, things can be accomplished, Fullerton said, without relying on a federal office or state bureaucracy for results.
“Frankly, this metro area isn’t doing too bad,” he said. “One of our problems is, nobody knows the definition of what good times are; we’ve lost touch with the notion of how well are we doing... We spend a lot of time whining and gnashing our teeth, instead of stepping up and competing.
“If you take away the Northeast, Florida, California and Las Vegas, you probably have a reasonably growing economy—they’re taking all of us down.”
Until a better sense of prosperity returns, Fullerton said, the region needs to collectively fasten its chinstrap: “We need to work in the interim to get ready for the next wave, with our infrastructure, roads, sewers, and getting our incentive policies in place so that when that business does show up, we’re past the starting line and ready to go.” 