The State of the Union: Can Government Create Jobs? Should It Even Try?

In a speech that focused overwhelmingly on the challenges of the domestic American economy, President Obama repeatedly underscored the gap between an economy that is statistically in decent shape and the actual lived experience of tens of millions of working people. “The cold hard fact,” said the president, “is that even in the midst of a recovery, too many Americans are working more than ever just to get by – let alone get ahead. And too many still aren’t working at all.”

The challenge of work in early 21st century America is hardly a secret, and Obama repeatedly decried the underpayment of too many, the rising inequality, and the sclerosis of Washington in dealing with the issues. He promised unilateral executive action to raise the federal minimum wage to $10.10 where possible without congressional action, and he urged a multitude of policies ranging from tax reform to investing in high-tech manufacturing as a path forward.

The focus on the future of work is imperative. The way that Washington approaches that future, however, is muddled. Perhaps that is inevitable. The role of the federal government in easing the transformation underway in work is unclear, and while many either blame Washington for unemployment or look to government to solve it, unless the federal government were to actually hire the 12 million people currently unemployed according to official labor statistics, it is less evident how government can do more than ameliorate the pain of job loss.

A more honest speech – and let’s face it, a speech that no politician has yet to give – would acknowledge that the multigenerational transition of the American labor force away from large-scale factory employment of mid-20th century industrial America will never reverse. It would acknowledge that the shifts were caused by a potent mix of technology that includes software and robotics, by a relentless drive in the developed world in general but America in particular for low-cost goods, and by the globalization of supply chains and finance in part enabled by technology and fueled by that drive. It would acknowledge that the role of government in these transformations was peripheral, and that the capacity of government to “do something” about it is limited.

Also missing in our national conversation is the recognition that our official snapshots as portrayed by numbers such as the unemployment rate and GDP sorely miss much of daily reality. A new high-tech factory touted by Obama may boost output and productivity but it may do very little to boost employment. In his speech, Obama lauded a new Detroit business that now has more than 700 workers. Impressive, and important, but that is a far cry from the auto plants of the 1950s that employed many thousands several times over.

It may be closer to a new morning in America than a return to dark days, but in all of these Washington discussions, there is a nagging sense that too many people expect to wake one day and find that we have returned to a misty 20th century golden age of high-wage jobs and employment. The truth is that America of the 21st century will not be a locus of manufacturing jobs anymore than America of the 20th century was a locus of farming jobs.

The truth is also that the very way we measure our success by jobs and GDP misses much of what is going on in our economic lives today. If you are one of the young entrepreneurs lauded by Obama in the State of the Union address, you may succeed in crafting viable business, or you may fail. In neither case will you likely show up as either employed or unemployed in surveys conducted by and a used by the Bureau of Labor Statistics to create employment reports. And if you open a high-tech factory, you may boost GDP and do little to boost employment.

The point is that there is much about our fluid and often unforgiving labor market that we do not even adequately measure and that we do not address sufficiently. For many, these are creative dynamic times, full of new ideas and new companies; for many as well, these are times of little hope and less opportunity. Both realities exist, and no generalization and no official numbers can possibly do those divergent realities justice.

Obama was remarkably upbeat, and refreshingly so. We have for too long focused relentlessly on the negatives that afflict us, and acknowledging other more constructive realties, especially in employment, should have at least some air time. But always, we should not expect government to solve these structural changes, and we should ask our officials not to promise what cannot be delivered. If there is to be a new wave of American growth and opportunity, it is likely to be because millions seized their own opportunities and overcame their own challenges, and not because government was prevented from doing harm or because it managed to do great good. It is natural to focus on government given the pageantry of the State of the Union, but while the actions of Washington can help or hurt on the margins, the world of work, employment and a changing economy is being daily shaped by the actions of all of us far more than by the decisions of a few of us.

Read more coverage of the State of the Union on LinkedIn.

Photo: Larry Downing/Pool/Getty Images