Goolsbee: why members of President’s Council on Jobs will hire in the US (video)

Austan Goolsbee, President Obama’s chief economist says he is optimistic that the corporate executives who serve on the President’s Council on Jobs and Competitiveness will actually hire workers in the US, rather than overseas.

The Council, headed by General Electric Chief Executive Officer Jeffrey Immelt, will meet with the President at the White House Thursday afternoon.

Dr. Goolsbee told reporters Thursday morning that he think the members of the group will not just pay lip service to hiring US workers but will actually do so. Speaking at a Monitor-sponsored breakfast for reporters, Goolsbee said, "I actually think it is going to be in their interest," to create jobs in the US. He noted that General Electric's appliance division recently moved some jobs from Mexico to the US.

Several factors support his optimism, Goolsbee said. "“The comparative calculus, let’s call it, of locating in the US is moving in the US’s favor. Our productivity remains very high. The wages in some of these other countries have gone up as they get richer and they are no longer poorer countries. It gets more expensive relative to the US."

Another factor working in the nation's favor, Goolsbee said, is the fact many of the firms represented on the President's Council on Jobs make heavy use of capital – like sophisticated factories and high-tech machinery. "Capital is very productive in the US and the capital intensity of a lot of these businesses is pretty high, so the labor share is not as big as it once was. And so it makes the US an attractive place," Goolsbee said.