Worldwide Crisis: Two Billion Unemployed or Given Up Job Search

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According to Brittany Stepniak on the Wealth Wire, “Starting up your own business requires a lot of work, money, support, and dedication. But it also needs to be able to count on consumer spending. Unfortunately, even the giant super-corporations are struggling in light of recent tax increases and poor consumer confidence…it’s no wonder the private sector is failing.”

Consumer confidence is ever-crumbling and dozens of small businesses are dying by the day.

Meanwhile, those looking for jobs tend to look for government jobs as opposed to private sector jobs simply because they tend to pay more – unless you have your PhD or professional degree. However, for people only obtaining a high school diploma or a couple of years of college, Uncle Sam tends to treat you better than the private sector can afford to.

The federal government’s payroll is a solid 16 percent higher than it would be if it paid its workers private sector salaries.

Take a look at the chart below showing federal government pay vs private sector pay.

*Image courtesy of Kevin Drum at MotherJones.

This is interesting and perplexing for two primary reasons: the government is in debt up to their eyeballs, yet they are paying the most unproductive people the highest salaries and the need for stronger and more sustainable job creation is intensifying by the day. People need to feel more confident about starting up a business, they need incentives, and they need their fellow community members to be willing to spend a couple of extra dollars each month.

Tax increases, catering to government employees, and inflation pose serious threats to the goal of growing the private sector.

In reality, private sector development should be at the forefront of the global economic policy agenda. Just look at the numbers for proof of this reality. Worldwide, there are two-billion working-age adults currently unemployed and no longer seeking jobs. Another 1.5 billion are only marginally employed.

Locations and sectors with strong potential for job growth must be honed in on so we can achieve a faster pace of sustainable job creation.

From WorldBank:

Combining analytical rigor with targeted policy interventions, the Competitive Industries practice of the World Bank aims to help the Bank’s client countries take a market-driven approach: focusing investment in higher-value industries that show the greatest promise for future job growth. In tandem, a related Bank practice – on Innovation, Technology and Entrepreneurship – advises client countries on ways to encourage innovators and risk-takers, whose new ideas may create entirely new industries.

Realistically, not every country is poised to create new high-growth hubs like Silicon Valley or the Research Triangle – or the “Silicon Roundabout” cluster now being established in London. It’s not necessary, however, for every country to try to leapfrog Apple or Samsung or Google: The experience of many fast-developing countries that have spurred growth in precisely targeted sectors – like Morocco in automobile parts and aeronautics, Malaysia in electrical equipment, South Korea in electronics, and Chile in high-value agricultural products – show that economies can identify and establish a more promising place for themselves in the global value chain.

It’s time for us all to come together to tackle the joblessness crisis – investors, innovators, governments, labor unions, and corporations alike need to stay pro-active on this front.

 

See more on  Wealth Wire.