Saturday, March 24, 2012

Hope, entrepreneurship and innovation driving US economic recovery

Economy is up but jobs are scarce

By Wan Suhaimie Saidie 0

CHASING THE AMERICAN DREAM: Hope, entrepreneurship and innovation driving US economic recovery, writes Wan Suhaimie Saidie


It appears that the United States economy is improving. In Boston, where I have been based for the past nine months, things appear to be better. 

However, in spite of my tendency to look at the bigger picture, I observe that finding decent-paying jobs can still be a struggle even for new graduates from Harvard University and the Massachusetts Institute of Technology.

Although their chances of landing a better-paying job are higher than their non-Ivy League counterparts, some may have to temporarily settle for less demanding and relatively low-paying jobs in restaurants, sales or tutoring while waiting for their dream jobs to come by.

Due to the current economic environment, the wait could even take longer.

Case in point: While shopping for an Ipod for my son at an Apple Store in Boston, I was attended by an African American named Mariam. The friendly store front sales manager told me she had been working at Apple for more than a year.

But more surprising was that she has a Master's degree from Harvard. Clearly, it was not the ideal job that she was hoping for.

Graduated in the midst of the US financial crisis and its highest unemployment level in more than 20 years, Mariam is still hoping to get a job in the education sector.

"I'm still waiting ... I want to contribute to education," she said.

Mariam is one of many who implicitly fall victim to US government spending cuts, which left crucial sectors including education in dire need of more funds and talent to undergo reforms.

Then there are the risk-seekers who hold strongly to the "American dream", venturing into start-ups or small businesses in spite of the high probability of failure in this current economic environment.

Justin Moore, a co-founder of Tap.Me, is one example. He graduated from MIT with a degree in mechanical engineering.

Finding no career that interested him, he ventured northwest to study at Tribeca Flashpoint Academy; a digital-age vocational school in Chicago founded by entrepreneur and turnaround whiz Howard Tullman.

Moore told Inc. magazine that in Tribeca, learning was more hands-on, like "How do you organise and get people together to actually execute?" instead of "How do you formulate solutions to problems?" which MIT is famous for.

While the micro picture appears to be mixed, depending on which of the 50 states you are in, in the bigger picture, things are looking less dire.

To a certain degree, it has turned more promising.

Based on the findings of an Associated Press survey of leading economists last month, the US economy appears to be improving faster than anticipated.

In fact, it has been steadily improving since late last year.

Industrial output jumped in January after surging in December at the fastest rate in five years.

In spite of the rising fuel prices, auto sales are still booming.

And consumer confidence has reached its highest point in a year.

Even the housing market is showing signs of turning around.

More jobs have been created, which explains why US consumers are spending more and consumer confidence has risen over the past couple of months.

According to the ADP National Employment Report, the private sector added 216,000 jobs in February, higher than economists' estimate of 208,000.

The bulk of the gains, with an increase of 108,000 jobs, came from small businesses while medium-sized firms added 88,000 new positions followed by big companies, which created 20,000 jobs.

It has become apparent that the 2009 stimulus is showing some positive results and is estimated to have saved 1.6 million jobs, according to a conservative estimate.

The non-partisan Congressional Budget Office estimates that, by the end of this year, the stimulus will have prevented as many as 7.1 million people from joining the ranks of the unemployed.

Though the unemployment rate has abated to 8.3 per cent in January this year from its peak of 10.1 per cent in January 2010 or 16 million Americans, there are still about five million more jobless than there were at the start of 2007. This does not take into account those who have given up looking for work.

The writer is  an economist who is taking a year’s break  in Boston

Read more: Economy is up but jobs are scarce - Columnist - New Straits Times

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