Creating jobs: takes more than free-market

Jim Stanford, Opinion, The Globe and Mail:

The dismal experience of Europe has proven that a single-minded focus on austerity and debt reduction is economically self-defeating. We can’t pay off deficits until we put everyone – starting with our motivated and educated youth – back to work. The bigger the cutbacks, the worse the unemployment … and the deeper the debt.

Instead, the next government should emphasize continuing support for public services and infrastructure, partnership with private sector capacity expansions, and more support for training and adjustment programs to prevent displaced workers of any age from falling by the wayside of the labour market. We also need stronger regulations to protect young workers from abuse by contract agencies and other unfair employers.

Investing in education is a rational response to a downturn: If you can’t work, you might as well enhance your skills. Ontario’s made great progress in recent years on this score (in both schools and postsecondary institutions). And don’t forget, education itself is an important source of quality jobs in its own right. Since the trough of the recession, employment in Ontario’s education sector has grown by 28,000 positions.

Indeed, the same is true of public services in general. Health care, for example, has created almost 80,000 jobs in Ontario in the same period – far and away the biggest job-creator in the province. In total, public sector and non-profit agencies account for fully 45 per cent of the 265,000 jobs created here since the recovery began. These jobs, on average, require higher education, pay higher incomes, and demonstrate higher productivity than most new positions in the private sector (especially those lousy precarious jobs). So instead of seeing public services as a “burden” on the economy, we should see them as a source of growth and opportunity in their own right.

What’s really needed here is a focused push to stimulate innovation and investment in targeted industries: high-tech, export-oriented sectors that are key to our future expansion. Across-the-board tax cuts and deregulation aren’t doing the trick. We must learn from other successful high-tech exporters (in Europe and Asia) with sector-focused strategies that carve out niches for Ontario-made products and services in dynamic, trade-intensive sectors. In addition to direct employment in these sectors, we’ll get the spin-off jobs (not to mention tax revenues) that result from successful tradable industries.

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