I hope people take Howard Gold’s most recent post at MarketWatch to heart. In it he quotes liberally from business prof Gerald Davis about job creation in the United States:
It’s Labor Day weekend, and despite unemployment under 5% and nearly 15 million private-sector jobs created since February 2010, nobody’s celebrating.
Workforce participation is stuck near historic lows, six million people are part-timers but want to work full time, and wage growth remains subdued.
Both presidential candidates have talked a good game about jobs and the economy, but neither addresses the real problem. The U.S. job-creation machine—once the envy of the world—is broken, because American corporations cannot create steady, well-paying jobs here in the USA while also providing maximal returns to their investors, who are really in charge.
The basic message is that publicly held companies are not our friends and that the nature of large enterprises has changed. They are too narrowly focused maximizing share value and too little on building businesses.
He mentions lots of possible causes for the change including the growth in the role of institutional investors, corporate raiders, globalization, and the Internet. He does not mention the change in tax rules which incentivized companies to increase executive compensation in the form of stock options which coincided with a lot of the transition. Somehow that seems like more than a coincidence to me.