President Obama recently took a short stroll from the White House and through Lafayette Park to give a speech in what might be termed enemy territory – the U.S. Chamber of Commerce. The subject was jobs and what the Chamber can do to jump start hiring by the companies that form its membership. Noting that American companies are sitting on approximately $2 trillion in cash, the president challenged the Chamber to invest some of that money by hiring Americans who are out of work.
“Many of your own economists and salespeople are now forecasting a healthy increase in demand. So I want to encourage you to get in the game,” Obama said, referencing the tax credits his administration negotiated to spur new investments. “As you all know, it is investments made now that will pay off as the economy rebounds. And as you hire, you know that more Americans working means more sales, greater demand and higher profits for your companies. We can create a virtuous cycle. Not every regulation is bad; not every regulation is burdensome on business,” he said. “Moreover, the perils of too much regulation are matched by the dangers of too little.”
Relations between the president and the Chamber – one of the nation’s most powerful lobbying groups — have been chilly and the speech was an effort to find common ground. Since the Democrats’ defeat in the November mid-term election, Obama has been trying to mend fences with big business. One part of that strategy was to hire Bill Daley, a former Chamber board member and JP Morgan Chase executive, as his new chief of staff to replace Rahm Emanuel. Additionally, he named General Electric CEO Jeffrey Immelt to head an economic advisory panel dedicated to job creation. According to the president, “I will go anywhere anytime to be a booster for American business, American workers and American products, and I don’t charge a commission.”
The Chamber gave the president a warm welcome, with the organization’s president Thomas Donohue expressing the body’s “absolute commitment” to working with the White House on turning around the economy and creating new jobs. “Our focus is finding common ground to ensure America’s greatness in the 21st century,” he said. “America works best when we work together.”
The president’s remarks came on a day when several Illinois firms warned that they are planning to lay off employees or close facilities. For example, Kmart is planning to close several stores in Illinois. Gold Standard Baking, Inc., will close a commercial bakery in Chicago, slashing 73 jobs. Another 67 employees are likely to be laid off at Itasca-based C. D. Listening Bar Inc., which sells DVDs, CDs, books and video games online at DeepDiscount.com. AGI North America, LLC, a paperboard box manufacturing company in Jacksonville, is closing at the end of March, putting 70 employees out of work. Gray Interplant Systems, Inc. – a warehousing and storage company in Peoria and Mossville – is planning to lay off 167 employees in April.
So why are American companies not hiring – or not hiring on their home turf? According to the Chamber’s Donohue, it’s a variety of reasons, including new regulations contained in the Patient Protection and Affordable Care Act and the Dodd-Frank financial reform bill. Additionally, companies are holding onto their cash to fund future acquisitions. Consolidation makes new regulatory burdens easier to bear. Once companies’ regulatory costs are clear and under control, they can begin hiring, he said. Finally, demand remains relatively low. Once spending improves, the Chamber believes that companies will have no choice but to invest in additional personnel to meet that demand. As consumer and business spending grows, so should jobs.
And, the jobs are going elsewhere. The Economic Policy Institute, a Washington think tank, says American companies created 1.4 million jobs abroad in 2010, compared with less than 1 million in the United States. The additional 1.4 million jobs would have cut the unemployment rate to 8.9 percent, according to Robert Scott, the institute’s senior international economist.