What leaders must do to confront this new global reality
"What the whole world wants is a good job," writes Gallup Chairman Jim Clifton in his book The Coming Jobs War. "Humans used to desire love, money, food, shelter, safety, peace, and freedom more than anything else. The last 30 years have changed us. Now people want to have a good job, and they want their children to have a good job. This changes everything for world leaders. Everything they do -- from waging war to building societies -- will need to be carried out within the new context of the need for a good job," he writes.
Without significant, sudden GDP growth, America won't experience significant job growth.
That's a bold statement. It's drawn from deep advanced analysis from Gallup's U.S. and World Polls, macroeconomic data on job creation, trends in world economics, and insights from the world's foremost thought leaders.
The discovery that the whole world wants a job more than anything else has significant implications. "The coming world war is an all-out global war for good jobs," Clifton writes. "If countries fail at creating jobs, their societies will fall apart. Countries, and more specifically cities, will experience suffering, instability, chaos, and eventually revolution. This is the new world that leaders will confront."
This prompts serious questions: What kind of war? What kind of leadership does such a war demand? And what would winning the jobs war look like? In the following conversation, Clifton explains what a jobs war means to leaders, why cities are in the middle of one, and what -- and who -- will win it.
GMJ: You start the book saying, "The coming world war is an all-out global war for good jobs." That's an extreme statement, and "war" seems like an extreme term.
Jim Clifton: It is aggressive. But societies, countries, and cities will either grow and create the next empires and everything that goes with them or become failed states where hell is coming. The range of potential outcomes for societies is really much closer to war than anything else. And what will happen to countries when they lose the jobs war will look like the aftermath of war.
The other reason the term "war" makes sense is because the things that influence leaders and societies around the world will be driven much more by jobs than by military actions. It's already starting. It's very hard nowadays to force citizens to support doing things by use of the military. Basically there's no perfect place -- no pivot point -- to go bomb, and that's what the military does best. The real pivot point for countries -- and it's getting to be more so all the time -- is jobs.
GMJ: Why jobs? Why not peace or security?
Clifton: That used to be what the whole world wanted. But global society has changed in the last 30 years. Now what we all want is a good job. And a good job is a job with a paycheck from an employer and steady work that averages 30 or more hours a week.
GMJ: Is America winning the jobs war?
Clifton: No. Countries go broke when their GDPs fall because that's when jobs start being lost. Jobs and GDP rise and fall together. And the U.S. is going broke. So without significant, sudden GDP growth, America will not experience significant job growth. And without sudden job growth, it will not experience significant GDP growth.
And then there's China. The United States has by far the biggest GDP in the world. It has the biggest economy in the world. I'm always amazed by how few people know that the U.S. GDP is nearly $15 trillion dollars annually and China's is only about $6 trillion. But China's growth is trending up, and America's is trending down. America's GDP growth is less than 2% a year, but China's is about 10% annually. Simple math shows that China will exceed the GDP of the United States in less than 30 years.
GMJ: What happens then?
Clifton: You know the golden rule -- she who has the gold, rules. If America doesn't have a disproportionate financial advantage that gives it the moral, economic, and leadership authority it has now, other national leaders won't need America's approval. American support won't mean as much because the U.S. won't have a trillion dollars a year to spend on the military and general global security. It's already happening -- Africa and Brazil look as much to China as to the United States for economic leadership.
Military leaders must consider good jobs even in the middle of war -- but especially when planning for peace.
And then the U.S. won't be able to afford its own entitlements, social programs, and services: Social Security, Medicare, Medicaid, public schools, universities, local police and fire fighters, pension funds -- not to mention R&D, which is what entrepreneurs need to create companies. So when businesses and jobs fail, tax bases shrink. Government has less tax money to support everything, and things deteriorate fast. When businesses fail, a country fails.
GMJ: What is the difference between a good job and any other job?
Clifton: As I mentioned, a good job is consistent 30-plus hours a week, with a paycheck from an employer. That's the new ultimate marker for world leadership -- how many people have a good job. The difference between a good job or a formal job and an informal job is the difference between a modern economy and a developing one, where I trade you some hay for a chicken. If you and I are trading hay for chickens, that's probably just survival. Here's the other thing: If you have a good job, your wellbeing is higher than when you and I are trading a chicken for hay.
What's really important is whether you think the best part of your life is ahead of you or behind you. If you have a job where you think the best part of your life is ahead of you, your wellbeing really goes up. The state of mind of "the best part of my life is ahead of me" predicts high wellbeing.
GMJ: Why does wellbeing matter?
Clifton: Because nothing great happens in an environment of misery. Inspiration really does matter. No one is productive if they're miserable. And people with low wellbeing don't want to start a business. But high wellbeing -- that's a marker for everything good. Unbridled, crazy enthusiasm like there was during the gold rush or the dot-com boom, that's what starts whole new industries. That kind of inspiration creates all kinds of energy, and that energy creates jobs.
GMJ: How do you mean? What happened during the gold rush?
Clifton: So let's say that you're all set to prospect for gold -- "Let's load up the buckboard. We're headed out to them thar hills." Then I come along and say, "What's cooking? Do you have a pick? How about some axes? You gotta hit these rocks. What about flour, wheels, all that stuff? No?" And I sell you that. And I recommend a guide, and I send you to a buddy of mine who sells horses.
There was far more money in selling stuff to the miners than there was in gold. That principle is always true in every age, in every industry. And that's why wellbeing is the new ultimate marker for world leadership. Wellbeing has a lot to do with the creation of jobs, the feeling that you've got it in you to succeed.
GMJ: How does this affect leadership?
Clifton: For one thing, if your job is making laws, think about how every law or regulation or policy you make affects jobs. Does it attract or repel entrepreneurs? If entrepreneurs leave, you'll have massive brain drain. If you're an educational leader, don't focus on graduation rates -- focus on how what you're teaching will result in a good job.
Kids want good jobs too, and if they don't see any or don't think they'll graduate, they drop out. Military leaders must consider good jobs even in the middle of war -- but especially when planning for peace. People act very differently when they've got a good job or the prospect of one to protect.
But the real center of job creation is on the city level. So every mayor, city council member, whoever, needs to focus their whole being on jobs and job creation. They must wage war for jobs every minute of the day.
GMJ: Why are cities the center of job creation? Why aren't individuals or countries or industries?
Clifton: There is huge variation in output in the United States by city. That seems like an obvious remark, but it's not.
GMJ: How so?
The Jobs War of 1970-2000 changed everything for the whole world, but you don't read about it in history books.
Clifton: Look at the burdens of government, the education rate, geography, all that, and ask why Detroit is going down the tubes and San Francisco just keeps succeeding like crazy. Then ask, "Where is leadership most effective -- at the local level or the national level?" Federal leadership of job creation doesn't work. It can have some influence, lowering taxes a little bit or having fewer regulations. Actions like those have an impact. But it's like the weather. Everybody lives under the same conditions, yet some cities succeed and others fail.
The difference is in the local leadership -- local CEOs, philanthropists, people with a deep emotional investment in their cities -- influential people whom I call the "local tribal leaders." Detroit's tribal leaders let go of what not long ago was the greatest city in the world. San Francisco's tribal leaders, who continue to help fuel one high-tech boom after another, have clearly done the opposite, and the city and surrounding areas keep thriving.
New York was even worse than Detroit. When I first started traveling to New York 35 years ago, they would tell you not to leave your hotel at night. Businesses were getting out, fleeing the city. Then the city's tribal leaders got together and fixed it. The federal government didn't fix New York; its own leaders fixed it.
GMJ: Do you think Detroit can fix itself?
GMJ: Do you think it will?
Clifton: I'd have to look at some numbers, but let me say this. Alan Mulally [president and CEO of Ford] is an unusual guy.
GMJ: In what way?
Clifton: I've noticed this about some friends of mine: Their energy is visible, and when they come into a room, the energy changes. Mulally has that energy, and he's got optimism. But more importantly, he has strength underneath it. So if Detroit makes it, it will be because of Mulally and tribal leaders like him. Detroit needs people with that kind of energy and drive who won't let the city die. That's why everything starts in cities -- the incredible need to make your city win. That is the exceptional difference between America and other countries. When we get knocked on the canvas, we get back up.
GMJ: We talked about how there's no guarantee that America will win the jobs war and that the U.S. GDP is trending the wrong way. Would you say the U.S. jobs decline is reversible?
Clifton: I think so. Remember, we've been here before. Thirty years ago, the world's best economists were saying that America was going to lose everything to Japan and Germany -- that their economies were booming while America's stagnated. Then came the Internet. The Jobs War of 1970-2000 changed everything for the whole world, but you don't read about it in history books. And it started in California when a bunch of entrepreneurs started a $100 trillion technology industry and created millions of jobs.
That said, our only real solution to winning the jobs war is job growth. All U.S. universities and all national leaders, city leaders, Wall Street, everyone needs to say, "How do we get to a $60 trillion GDP? How do we quadruple exports?" Then we build strategies for competing globally and winning global customers. And the companies that we invest in and help the most must have global implications. That's just a whole different mindset.
-- Interviewed by Jennifer Robison