(Bloomberg) -- U.S. President-elect Donald Trump, who scored a victory by coaxing United Technologies Corp. not to close a Carrier factory in Indianapolis, will need a more comprehensive strategy for the U.S. labor market, said Mohamed El-Erian, Allianz SE’s chief economic adviser.
“When it comes to macro effects this is not a scalable policy,” El-Erian said Friday in an interview on Bloomberg Television. “You can’t move the macro numbers in a major way through these micro interventions. You also need the macro policies.”
Carrier agreed this week to keep about 1,100 jobs in Indiana while moving about 1,300 positions to Mexico in exchange for $7 million in tax and other incentives from the state, a package criticized by politicians including Senator Bernie Sanders as a reward to a company for threatening to cut U.S. workers. Trump, a Republican real estate mogul, said during the campaign that his policies would create 25 million jobs in a decade.
“It’s going to be hard to create that amount of jobs,” said El-Erian, who is also a Bloomberg View columnist. “We’ve created over 14 million since the Great Recession, and there isn’t that much of a pool” of potential workers available.
The U.S. added 178,000 jobs in November, according to a Labor Department report Friday. And while the unemployment rate improved 0.3 percentage point to a nine-year low of 4.6 percent, that was partly because of a drop in the number of people in the workforce.
Trump has said tax reform, infrastructure spending and reduced regulation will prompt more hiring. El-Erian said those initiatives are worthwhile and should be seen as part of a broader approach that includes education reform and better job training.
Friday’s report included some disappointing data. Average hourly earnings in November fell by 0.1 percent from the prior month to $25.89, the first decline since December 2014. Payrolls at factories fell by 4,000, after a 5,000 decline in the previous month.
“The critical issue that you’re starting to hear about is the quality of jobs. It’s not just a quantity issue,” El-Erian said. “Today’s numbers on wages and today’s numbers on the unemployment and today’s numbers on the participation rate tells you that this element of the quality of jobs is very important.”