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Job Sector Investments
To Carrie Leana, George H. Love Professor of Organizations and Management, there is much government ought to consider in addressing a nation in crisis.
Leana, an expert in high-performance work practices, says investments in areas such as technology and infrastructure-as some have suggested-should be accompanied by investments in how the work gets done.
"The government's immediate role is to try to mitigate the effects of the current economic crisis through direct investment," she says. "I think we live in interesting times, because the federal government will be involved in the economy in a way that it hasn't been in decades." Leana is the director of the Katz School's Center for Health and Care Work, which conducts research on direct care workers and other health care professionals, a segment of the workforce that is worthy of government investment, she says.
These are the jobs that cannot be sent overseas and instead remain in the United States over the long term. And because a large percentage of people working in direct care are low-income workers, they spend more of their paychecks on daily needs, thus infusing money into the economy. Moreover, it is in this sector-people who work with the elderly and disabled, for example-that the nation is nearing a state of crisis. Not enough people enter these jobs, which include difficult, undervalued work, and as the baby boomer population ages, more are needed, Leana says.
Sukits uses examples from the Great Depression in his classes to point out the problems of government intervention; in his opinion, "these sorts of [stimulus] packages rarely work," because they take too long to produce money that cycles back through the economy.
But Leana is of a mind that government spending can help enormously, depending on how it's done.
One factor to look at is whether the spending has multiplier effects, meaning a dollar of government investment creates additional dollars elsewhere in the economy. Second, government investment should be spent quickly so that its effects are felt in the short term. She points to child care, including preschool education, as one prime example.
"The research evidence here is clear and compelling. With investments in preschool education, you get a big payoff," Leana says. "You get an immediate effect in that people who had to pay for child care before will now have that money in their pockets to spend. Child care investment also has a multiplier effect, in that it allows parents to fully participate in the workforce and thus earn more. It also saves money over the long term, as children exposed to quality preschool are more productive citizens when they become adults. So preschool education is just a no-brainer in terms of the stimulus package."
Policymakers also should be thinking about directing stimulus funds toward areas that will yield long-term benefits, Leana says. Health care coverage for the uninsured is one example, as is investment in the workforce that provides health care and other care services.
Money for grades K-12 and higher education is another good longterm investment, because preparing people for the jobs of the future will ensure a globally competitive workforce, and "right now, we're losing ground on that," Leana says.
Public schools and health care systems both suffer from a lack of sound organization, she believes. "A lot of the failure in these sectors is due to bad management practices. It's not that we don't have great facilities and technologies and people; it's effective coordination that's lacking," she says.
Investment in evidence-based research on how best to organize and coordinate work in these sectors will help to correct that problem, she says. In this way, the country will fuel the intellectual infrastructure that is needed for sustainable growth through 2030 and beyond.
But regardless of where the government winds up spending its money, the worst thing it could do is stay in the same patterns that existed for the past decade, Leana says.
"One thing we do know is if your programs and policies are ineffective, and your response is just to hunker down and keep doing what you've been doing in the past, that's going to produce a negative spiral," she says. "Unfortunately, I think we've reached that point in many of our core industries and in our economic policies from Washington, and it's now time for a substantial change of course."
