NEW YORK (MainStreet) – Wondering where all the jobs are? Just follow the money.
Big businesses and banks currently have enough extra cash lying around to create 19 million jobs between 2012 and 2014 and thus bring unemployment in this country back down to its normal rate of 5%, according to a new report from economists at the University of Massachusetts’ Political Economy Research Institute.
In total, America’s corporations are sitting on an estimated $3.6 trillion in liquid assets and cash reserves, or roughly a quarter of the country’s entire gross domestic product. Some of this is in fact needed to cover companies in the event that their business – or the economy as a whole – takes a turn for the worse. But according to the report, even accounting for a “highly risky economic environment,” these corporations would still have $1.4 trillion in excess liquidity.
To put that in context, that’s nearly twice the amount of money that the federal government set aside for its stimulus package to rescue the economy in 2009. But while the stimulus saved or created some 3 million to 4 million jobs, the economists predict that these private sector funds could do significantly more if invested in the right way.The group of economists used data from the Commerce Department that estimated the number of jobs created from every $1 million spent in a number of sectors including health care, infrastructure and small business lending. Based on this, they found there is the potential for the excess liquidity of banks and businesses to create more than 13 million jobs directly or indirectly, and another 5.4 million jobs would be created thanks to greater consumer spending from those who gained a steady salary.
These new jobs would extend well beyond the construction workers and temporary government employees who benefitted from stimulus funds. Engineers, doctors and financial managers in hard-hit cities around the country stand to benefit from an increase in the flow of money in the private sector.