President Barack Obama told the first meeting of his panel of outside economic advisers that the U.S. must deal with stubbornly high unemployment even as the recovery from the recession is well under way.
“The biggest challenge that we’re seeing right now is that unemployment is way too high,” Obama told the 23-member President’s Council on Jobs and Competitiveness yesterday. The advisory group, led by General Electric Co. chief executive officer Jeffrey Immelt, replaces the President’s Economic Recovery Advisory Board, which was headed by former Federal Reserve Chairman Paul Volcker.
In the month since he delivered his State of the Union address, Obama has sought to make the case that investments in education, infrastructure and innovation will help create more jobs. He reiterated that message yesterday, telling members of the panel, “We’re going to have to up our game in this newly competitive world.”
Obama told the group that he wants them to provide “some concrete deliverables” that will help lower the 9 percent unemployment rate.
Today the president is scheduled to meet at the White House with 14 Democratic governors -- including Deval Patrick of Massachusetts, Martin O’Malley of Maryland and Dan Malloy of Connecticut -- to discuss ways Washington can work with states to help spark job creation, according to a White House statement.
During a visit to Cleveland State University on Feb. 22, the president encouraged governors to form a group of “regional innovation clusters.” He cited the example of the technology industry in Silicon Valley and said state executives should reach across state lines to put together groups of industries and universities to support specific areas of innovation.
During yesterday’s meeting in the Eisenhower Executive Office Building next to the White House, the president was flanked by Immelt and UBS America chairman Robert Wolf on his right and by his chief of staff, Bill Daley, and the president of the AFL-CIO, Richard Trumka, on his left.
Immelt said he wants the group to put a “laser-like focus” on jobs, including the impact of education and immigration policy, global trade, research and development, and energy.
He told reporters afterward that members of the council would be talking to other corporate executives about creating jobs. “We know that the private sector has to lead the way,” Immelt said.
He said the biggest factor in job creation will be continued improvements in the economy and in the confidence of business leaders.
“The economy is getting better every day,” Immelt said. “It’s just belief in the future. As confidence gets better, more will be invested.”
Confidence was a recurring theme yesterday. The chief executive officer of American Express Co., Kenneth Chenault, told the president that he is seeing growth in small businesses and across industries, yet he is concerned that consumers aren’t spending and using their credit cards because of “uncertainty” in the economy.
“They’re being very rational, but that is alarming that 75 percent of the credit out there is not being used,” Chenault said.
DuPont Co.’s CEO Ellen Kullman said she doesn’t think 2011 will be as high a growth year for her business as 2010 was. She said a “dark spot on the horizon is construction.”
Training and Education
As he ended his remarks to the panel, the president said that many traditional jobs, such as those in retail sales, are “going the way of the bank teller” because of new technology. That’s why training and education are important, he said.
A degree from a four-year college is not always necessary, Obama said. He said that at a private dinner with technology company executives last week, Apple Inc. CEO Steve Jobs told him that the cost of wages isn’t the only reason the Cupertino, California-based company has so many employees in China.
Obama said Jobs told him that while Apple can hire top engineers in the U.S., the problem is finding mid-level workers who are “on the ground in the factory, who’s constantly tweaking and making sure that operations are functioning.”
The administration has forecast that the unemployment rate will average 9.3 percent for all of 2011, declining to an average of 8.6 percent next year. The jobless rate has been at 9 percent or higher since May 2009, the longest period of elevated unemployment since monthly records began in 1948.
Executives, Economists, Labor
Like its predecessor, the jobs and competitiveness advisory board is made up of business executives, economists and representatives of organized labor. Among those named to it by Obama are Richard D. Parsons, chairman of Citigroup Inc.; Roger Ferguson, CEO of TIAA-CREF and a former vice chairman of the Federal Reserve; and Laura D’Andrea Tyson, a professor of economics at University of California-Berkeley who was an economic adviser to President Bill Clinton.
Obama created the council to offer “nonpartisan advice” on strengthening the U.S. economy and ensuring competitiveness while creating “jobs, opportunity and prosperity for the American people,” according to the executive order.