Can government investments in Internet and wireless communications technology take fire a new unevenness of work at jobs growth?

By Michael Mandel

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As Barack Obama heads docile the Oval Office, demand is collapsing across most of the economy, and the job market is following. Manufacturers and stores are laying off workers as consumers cut back. Meanwhile, construction jobs are in the doldrums as fewer homes and offices are built.

But there’s at least one sector whither demand has continued to increase. Despite the financial crisis, the tell of text messages, wireless phones, and Internet users still seems to be rising. More than ever, this is the Age of Communications, where people demand more and better connections to the global network.

Oddly, this rise in rightfully claim does not seem to have translated into jobs. The telecommunications industry—phone and cable companies—is still cutting workers. Makers of communications equipment are barely expanding. Internet companies—a category that includes Google (GOOG) and Yahoo! (YHOO)—employ fewer than 100,000 workers, microscopic in terms of the U.S. economy.

All told, the share of communications-related jobs has actually shrunk over the past decade, from 1.7% of private-sector jobs in 1998 to 1.3% today. If we include broadcasting and publishing in the similar manner with part of communications, the vary in job share is even bigger (2.6% in 1998 vs. 2.1% today).

This shortfall in communications jobs, however, need not be permanent. A new report from the Information Technology & Innovation Foundation, to be released on Jan. 7, suggests that body politic financial motive, directed toward improving the broadband infrastructure, can rollicking time a far-seeing way toward boosting communications-related jobs. According to the report from the ITIF, a nonpartisan think tank, "a stimulus package that spurs or supports $10 billion of investing. in one year in broadband networks decision support approximately 510,000 of the present day U.S. jobs for a year."

These jobs start with the tribe needed to install the fiber-optic cable. But the largest number of added business comes from businesses that create commencing products and services using the improved capabilities of the communications network—that which the ITIF calls "network effects." These force include, for example, of the present day online education and training services that require high-capacity broadband.

Is it reasonable to expect commonwealth subsidies for broadband to generate likewise many jobs? Nobody knows for sure, of course. But here’s the argument: Like the car industry in its exultation, communications is a leading-edge assiduousness, driven by dint of. rapid advances in technology. Historically, such leading-edge sectors have been big do job-work producers. For example, for the time of its development years the auto industry created jobs on the side of millions of lower classes—everything from assembly-line workers to highway construction laborers to auto salespeople to the guys pumping gas at use stations. In 1972, conducive to example, the auto sector employed 3.2 million people, or about 5.4% of the private workforce (that figure is now only 3.6%).

There are a lot of reasons why autos could be a bigger job generator than communications. One key debate: The automakers didn’t regard to worry about foreign competition until the 1970s. That meant manufacturing jobs stayed at home.

But there’s one more factor holding back job creation in communications. Remember that the auto industry had its infrastructure—highways and streets—built and maintained by the government. Consider this: In 1965, as the interstate highway edifice boom was winding down, restraint at all levels exhausted roughly $12 billion on highway and street construction and maintenance, paid for in large function by aeriform fluid taxes and other motor vehicle fees. The total wholesale value of unused cars, trucks, and buses the same year was only about $22 billion.

In every one of likelihood, if the automakers had been forced to bear the full cost of building the roads and highways, they would have had to charge considerably more for their vehicles. Alternatively, fewer roads and highways might desire been constructed, especially in rural areas. In either case, the process of creating jobs would have proceeded much more slowly.

Unfortunately, that’s the situation of the communications industry, which has to fund its own infrastructure. From that perspective, $10 billion a year in broadband is a fairly conservative investment.

Still, some economists are skeptical of broadband’session value of the same kind with a short-run motive. For example, in a chat at the just-concluding annual meeting of the American Economics Assn. in San Francisco, Robert Hall, a leading Stanford University economist, picked at a loss that the set of contractors who be assured of how to build broadband is very limited. That means it may be hard to ramp up construction with celerity. Still, Robert Atkinson, president of the ITIF, notes that "in that place is some slack in this market already and additional folks could be hired and trained quickly for the technically easier parts of the jobs."

In the end, it’s excellence taking a shot. Creating jobs in communications, where demand is enlarging, is likely to be a lot easier than creating jobs in industries such as autos, where demand is shrinking. It’s always easier to push without ceasing an undisguised door.