Since the current economic downturn began, roughly coinciding with the announced collapse of Lehman Brothers, pundits and politicians have spoken frequently of the need for job creation as an essential component of economic recovery. Creating work and creating jobs seem to be two different, even if related, objectives and outcomes.

Creation of work implies a shorter horizon than creation of a china job. I create work when I identify one or more related or unrelated tasks for which compensation is appropriate for one or more individuals. Somehow a job implies longevity, if not comparative permanence, to the work. The tasks may be the same, but the duration differs.

If I want to put people to work, I simply need to identify the tasks, the skill set, the appropriate compensation, and the funding source. If I want to put people to work, the only missing components are the identification of an available labor source and the hiring of a sufficient number of individuals from the identified labor pool.

If I want to create jobs, I have a different challenge. For decades, employers have used automation and process improvement to reduce the labor content of their products and services. Some employers in some cases concluded that outsourcing or off-shoring certain jobs or functions had financial advantages that could yield financial advantages in the short or long term. In the interest of improved profitability or price competitiveness, employers made direct and indirect processes leaner with respect to labor and other resources.

Now, the call goes out to create guangzhou jobs. This call is distinct from a call to provide work to those not currently working but desiring work. This call has an implied sustainability to it.

So, employers, having dedicated resources to improving productivity and reducing labor content of products and services, now hear their elected officials promising to create jobs. As an employer, I can create jobs if I agree to reduce my profits or I can create jobs if the demands in the market exceed the capacity or capability of my workforce. The market either tells me it needs more of my existing goods or services than I can provide with my current workforce or it needs goods and services that I cannot currently provide with my current workforce.

The issue of reduced profitability may find resolution in government incentives, likely either tax benefits or direct stimulus money for hiring. A demand-driven solution seems much more difficult to implement, even though it is probably more sustainable. A demand-driven solution requires a change in the markets for goods and services.

A government funded economic stimulus package may need to provide short-term incentives to create jobs coordinated with demand-side stimulus to stimulate the market for goods and services. Do policymakers act as if they understand this?