Job creation is one of the big topics at the annual meeting of the World Economic Forum in Davos this year. The group sees income disparity, unemployment, and underemployment as likely economic risks facing the world. That should mean that someone will do something to move countries to full employment again, right? If only.
Unfortunately, for all the attention that Davos receives, its influence is actually limited and the chance that it will spark a new urgency among businesses and policy makers, low. Not that people there are uninterested in jobs as an important issue. But the structure of the meetings and their relationship to governments and businesses makes it difficult for change to actually happen.
Davos looks behind
One of the large problems with Davos -- the event nickname, not the town in Switzerland -- is that it is reactive, not predictive. There have been too many crises that the people who met in the Swiss skiing town have missed in the past. In fact, shortly before the global financial collapse started to become obvious, the CEO of Lehman Brothers -- the major investment bank that would declare bankruptcy in 2008, "held forth on the state of the global economy before mesmerized journalists and cowering subordinates while other Wall Street stars mingled after-hours with the likes of Claudia Schiffer, the German supermodel," according to the New York Times.
At an average attendance cost of $40,000, according to CNN -- an amount that is about equal to the annual income poverty threshold for a family of eight -- this is an event for the well-heeled and established.
And because such people as the U.S. Secretary of the Treasury expect a good year for economic growth, with a projection of 3 percent in the U.S., there is a general expectation that things are getting better, as public radio show Marketplace reported. The more comfortable the powers that be, the less they feel the need for big change.
It is a schmoozefest
People go to Davos to talk and to see and be seen. Not that they skip difficult topics. Not at all. And talking is generally better than not talking. At least there is a chance for communication. But the annual meeting is by invitation to a select group of 2,500 government officials, technology hot shots, philanthropists, businesspeople, and media representatives. It isn't an official colloquy, trade summit, or negotiation round.
Instead, Davos is a bunch of VIPs and celebrities chatting. Sometimes the talk is probably earnest, like actor Matt Damon on the global water crisis. Other times, it may be "quite a bit of hot air," in the view of David Rothkopf of the Carnegie Endowment for International Peace, or even people "reveling in their own self-importance and smugness," as Anthony Hilton, financial editor of the London Evening Standard, said, according to a Marketplace report. That isn't necessarily an atmosphere conducive to productive change.
The usual suspects offer the usual answers
The real killer is that Davos is filled with the very people who helped make the decisions that put things into their current shape. Like most of us, they get locked into the decisions they made and the outlooks that they think explain the world. In part, it means the assumption that if there is growth, all is well, even if the growth accrues to the people at the top.
There is also the question of whether businesses, which would be happy to see growth, actually believe the numbers. Guy Ryder, director general of the International Labour Organization, told CNBC that the lack of job growth was the "gorilla in the Davos living room" that no one addresses. The chairman of JPMorgan Chase International said that the effort to draw people back into the labor force was a "structural issue" that governments need to help solve. For example, during one session, business leaders said there is a mismatch between the skills youth have and the qualifications companies need. No single company can fix such a problem.
So, don't expect the 8 million jobs still missing in the U.S. to suddenly appear. But, who knows? Maybe a hotel or ski resort in Davos is hiring.