THE ENTERPRISE--JOBS? YOU WANT JOBS CREATED?
HOW BAD IS IT? VERY BAD INDEED!
There are now about 30 million unemployed, given up, and underemployed people in the USA. That is a catastrophe! The 9.5% official unemployment rate--14.6 million people--doesn't begin to capture how bad it is. In the past 3 mo. alone, 1,155,000 people have dropped out of the employment hunt and "given up looking," joining previous dropouts to add up to 5.9 million who have stopped looking and don't get counted as officially "unemployed." Another 150,000 to 200,000 enter the job market each month wondering where they will find a job--most of which can't or don't. There are 8.5 million people working part time who would like to work full time--but they can't find any place to do that. There are now 3.4 million fewer private sector jobs now than there were a decade ago.
UNINTENDED CONSEQUENCES OF ILL-INFORMED POLICIES
Last week I wrote about this in one or two instances, but here is another one. The big flap about raising the minimum wage, supposedly to help entry level workers, has had the opposite effect, discouraging hiring of low level, and unskilled, mostly the young and especially young minority workers. Among that group unemployment is at least double the national average--or worse. The big flap about finding a way to accept more illegal immigrants makes all of these jobs problems worse. They might work for less, but there are so many of them, they can flood a market with low cost labor for those employers willing to look the other way.
JOBS GOING UNFILLED--A LOT OF THEM--REASONS VARY BUT HERE ARE A FEW
Our government has created a huge cultural problem--chronic aversion to work!
1) Unemployment benefits are so good compared to the wages being offered that some people have turned down multiple jobs, preferring to stay at home and collect lengthy unemployment. We are creating a society of what we used to call "Ne'er-do-wells"--people who become so used to the lazy lifestyle of unemployment that they opt to avoid jobs where they might actually have to WORK for a full eight hours, five days a week.
2) Skills that are in demand are not being taught by schools, and applicants are not willing or able to absorb the needed training, even when provided free. Schools run by bureaucrats and taught by ineffective teachers protected by unions are teaching how to boil eggs, do laundry and fill out forms instead of what is needed--hard science, math, etc. Those require both diligent students and competent, devoted teachers (a minority) Jobs going unfilled are hindering business; jobs that require a solid foundation of education plus some training, are available: medical technicians, Industrial hygienists, machinists (apprentices), and people who can learn to run numerically controlled machine tools and read blueprints, make calculations, etc. and then will show up for work and be a reliable worker!
3) The housing crisis has made it difficult or impossible to move, in order to take advantage of jobs that are available.. They cannot sell their house at any acceptable value, in order to buy a new one, where jobs are available. Thus pockets of very high unemployment remain, and it becomes a self-fuliffling prophecy: no jobs, terrible market for housing, low values, hard to move, etc.
4) Our society has created a culture that expects to be paid handsomely for "not working very hard." The wealthy financial manipulators portrayed in media and entertainment are as fictional as those media portrayals of work. Unions make it worse by demanding lucrative pay and benefits and flexible time off for mundane jobs. Thus companies do the only thing they can--THEY STOP HIRING. More Unions will make it worse. More government jobs set terrible examples, because the work is generally not all that demanding, and the protected status of these workers allow them to figuratively "get away with murder" in terms to avoiding hard work or demanding hours.
5) Consistently high fuel prices (by historical standards) make commuting far both expensive and time consuming. Thus job seekers want jobs that are close to where they live. In decades past, groups of 4-5 people would "car pool" and travel an hour each way to their work, so they could live in lower cost small towns further from the expensive cities.
6) Higher paying factory jobs in large numbers no longer exist, as the USA manufacturing base has shrunk and unproductive, expensive union workers have either been replaced with automation or outsourced to Asia. The jobs available are lower paying service jobs with less attractive hours: retail, restaurant, cleaning, and other service industry jobs. They also carry no "status" and thus are off-putting to previously well-employed and proud trades workers. Plus the trade jobs that remain in the USA have moved (see 5. & 6.)
Real work is "work," requiring a person to get up early, be at work on time, not miss work for routine personal matters and concentrate to learn and use training. We have created a society that isn't ready for "WORK."
IS THIS "CHANGE YOU CAN BELIEVE IN?" HELL NO!
Democrats have now controlled Congress for most of the past 3-1/2 years. Their control for the past 1-1/2 years has been dominant. The articulate, inspiring new President has been in office for over 1-1/2 years, and pretty soon, he may have to face the fact that he's made things worse, not better--and he needs to quit trying to blame George Bush for his problems. Remember, he was going to FIX EVERYTHING! I can't believe I am quoting New York Times Columnist Bob Herbert for the second time in a few months, but he says some very astute and correct things in a recent editorial. "The nation is facing a full-blown employment crisis, and policy-makers are not responding with anything like the sense of urgency that is needed." Right you are, Bob. He closes with the statement: "We're not heading toward the danger zone. We're there."
REMEMBER THE THREE STEP PROBLEM SOLVING PROCESS:
1) Understand the problem.
2) Define the problem.
3) Solve the problem.
Far too few government officials have meaningful experience in the private sector, in creating jobs, and fewer still have ever had to "make a payroll." Consider the case of Mitch Daniels, Governor of Indiana. Mitch has considerable business experience. While he's been governor, Indiana has overcome its financial crisis and has a balanced budget. As a state it is more attractive to employers than neighboring Ohio, which has a huge deficit and will be forced to take some kind of Draconian actions to remain financially solvent. Ohio's Governor, Ted Strickland is a former minister/preacher--but perhaps prayer is one of the best solutions when the mess gets as bad as it is in Ohio. His campaign is throwing mud at his opponent John Kasich for being a former Lehman Brothers guy--one of 800 at his level. But Kasich was one of the architects of the budget fixes during Newt Gingrich's "Contract for America" in 1994. Who might do a better job at setting Ohio right? Someone who's done it and knows how, or someone who will "pray" that it gets better--when his every action makes it worse?
REDUCING TAXES ACROSS THE BOARD IS NOT THE ANSWER, & CUTTING SPENDING MUST GO WITH TAX REDUCTIONS
What taxes are reduced is what matters--because some tax reductions will spur much more growth and expansion in the economy and that means jobs, than others. Some tax reductions mostly put more money in the pockets of those who will not reinvest it, and that simply raises the deficit. Cutting government spending will mean jobs go away too. That's why any jobs program and deficit reduction programs must be done in a coordinated manner. If done right, cutting taxes that spur investment in and expansion of job-creating activities will absorb many of those who lose their jobs as government waste is cut. Also, the increase tax revenue from business growth will compensate for the tax revenue lost due to tax cuts, and actually reduce the deficit. These are not trivial choices, and partisan politics can easily mess them up and cause the wrong choices to be made.
JOBS--GOOD NEWS? CHRISTINE ROMER, OBAMA'S COUNCIL OF ECONOMIC ADVISORS HEAD, GOES BACK TO COLLEGE
When she was originally at U. California Berkeley, she discovered and published with her husband, that government spending does not create net new jobs, it actually has the opposite, negative effect, pulling money away from the private sector which DOES create jobs. Maybe she'll find the part of her brain that she left at school when she left to be brainwashed into Obama-economics. Hopefully, when she is no longer beholden to Obama, she and her husband will go back to finding and exposing the truth about government stimulus--it is largely an oxymoron that costs more jobs than it creates. The only government stimulus spending that makes sense is if it repairs and enhances our infrastructure of roads, bridges, and similar badly needed work. That specific kind of spending creates jobs, and has a lasting benefit for all Americans.
UNIONS ARE A LEADING CAUSE OF JOB LOSS
When Democrats are in office and use their political power to support discrimination in favor of unions, jobs suffer. Unions add inefficiency. They add distrust. They add an extra party to every negotiation. And they add far more than their 2 hours a month of pay collected in dues, but insisting on inefficiency in work rules and contract provisions. That's why they are down to 7% of the work force in the private sector. However, they are strangling taxpayers in the public sector. The rampant inefficiency of government bureaucracies is amplified by unionized workers making more money, getting richer benefits and being less productive than private sector employees. Unions are the major reason that job growth in Right-to-Work-Law states is much higher than it is in heavily union influenced states (Michigan, for one example).
HERE IS ONE FORMER CEO'S APPROACH
This will take some time to read, but it is absolutely on target about what has happened, and it is written by one of the technology sectors most respected former CEO & Chairman (of Intel).
[NOTE: To make the figures larger, when you are connected to the Internet, click on the +, at the lower right corner of each.]
Download Andy Grove_ How America Can Create Jobs
OHIO SHOWS THE WAY--HOW NOT TO DO IT-- BY CREATING HIGH PRICED (WASTEFUL) JOBS FOR UNION MEMBERS
GOVERNMENT WASTE IS STAGGERING--AND NO ONE WILL ATTACK IT
Of course wringing out waste in government will create still more unemployed people. What needs to be done is to relax the unnecessary regulatory stranglehold on business, lower taxes that provide incentives for business to invest, and create new jobs. Some of the former government employees (those who actually want to work) will land in those jobs. Stimulus spending (what's left of it) should be redirected from "pork and patronage" to a massive public works program to repair and rebuild crumbling infrastructure: bridges, highways, water/sewage plants and so forth. This is one of few government spending programs that actually does create private sector jobs--and leaves a legacy of things in place to show for the expenditure. (Not boondoggles like the idiotic $400MM [not so] "fast train" from Cleveland to Columbus to Cincinnati that averages under 40 mph and requires ongoing state subsidies that equal or exceed the ticket prices per rider.)
REGULATION GROWTH CAUSES JOB LOSS WHEN DONE POORLY
Some regulations are necessary and valuable. Others cost jobs by either demotivating employers or by downright making industries less competitive with foreign competition. This requires skill and an awareness of how "bad regulations" damage the free enterprise system and "good regulations" protect Americans from abuses. Worst of all, the uncertainly of a "limbo"--where regulations are constantly changing, evolving and being redefined,--is a place that paralyzes business decision making and investment. This administration and its various councils and commissions have created a raft of new, onerous and business unfriendly rules and regulations. No recovery comes until some of these are rescinded or removed.
There is no way I can fully address the jobs issue in such a limited space. Hopefully the snippets I have included illustrate why it is not as simple as it seems, and why non-job creating people like politicians and government bureaucrats do such a lousy job of it. There are literally thousands of people like me--semi-retired from business, with the knowledge to help. Why don't the politicians ask for our help? Perhaps they won't like our recommendations?
Best, John
-----------------------------------------------------------
John L. Mariotti, President & CEO, The Enterprise Group, Phone 614-840-0959 http://www.mariotti.net http://mariotti.blogs.com/my_weblog/
------------------------------------------------------------
HOW BAD IS IT? VERY BAD INDEED!
There are now about 30 million unemployed, given up, and underemployed people in the USA. That is a catastrophe! The 9.5% official unemployment rate--14.6 million people--doesn't begin to capture how bad it is. In the past 3 mo. alone, 1,155,000 people have dropped out of the employment hunt and "given up looking," joining previous dropouts to add up to 5.9 million who have stopped looking and don't get counted as officially "unemployed." Another 150,000 to 200,000 enter the job market each month wondering where they will find a job--most of which can't or don't. There are 8.5 million people working part time who would like to work full time--but they can't find any place to do that. There are now 3.4 million fewer private sector jobs now than there were a decade ago.
UNINTENDED CONSEQUENCES OF ILL-INFORMED POLICIES
Last week I wrote about this in one or two instances, but here is another one. The big flap about raising the minimum wage, supposedly to help entry level workers, has had the opposite effect, discouraging hiring of low level, and unskilled, mostly the young and especially young minority workers. Among that group unemployment is at least double the national average--or worse. The big flap about finding a way to accept more illegal immigrants makes all of these jobs problems worse. They might work for less, but there are so many of them, they can flood a market with low cost labor for those employers willing to look the other way.
JOBS GOING UNFILLED--A LOT OF THEM--REASONS VARY BUT HERE ARE A FEW
Our government has created a huge cultural problem--chronic aversion to work!
1) Unemployment benefits are so good compared to the wages being offered that some people have turned down multiple jobs, preferring to stay at home and collect lengthy unemployment. We are creating a society of what we used to call "Ne'er-do-wells"--people who become so used to the lazy lifestyle of unemployment that they opt to avoid jobs where they might actually have to WORK for a full eight hours, five days a week.
2) Skills that are in demand are not being taught by schools, and applicants are not willing or able to absorb the needed training, even when provided free. Schools run by bureaucrats and taught by ineffective teachers protected by unions are teaching how to boil eggs, do laundry and fill out forms instead of what is needed--hard science, math, etc. Those require both diligent students and competent, devoted teachers (a minority) Jobs going unfilled are hindering business; jobs that require a solid foundation of education plus some training, are available: medical technicians, Industrial hygienists, machinists (apprentices), and people who can learn to run numerically controlled machine tools and read blueprints, make calculations, etc. and then will show up for work and be a reliable worker!
3) The housing crisis has made it difficult or impossible to move, in order to take advantage of jobs that are available.. They cannot sell their house at any acceptable value, in order to buy a new one, where jobs are available. Thus pockets of very high unemployment remain, and it becomes a self-fuliffling prophecy: no jobs, terrible market for housing, low values, hard to move, etc.
4) Our society has created a culture that expects to be paid handsomely for "not working very hard." The wealthy financial manipulators portrayed in media and entertainment are as fictional as those media portrayals of work. Unions make it worse by demanding lucrative pay and benefits and flexible time off for mundane jobs. Thus companies do the only thing they can--THEY STOP HIRING. More Unions will make it worse. More government jobs set terrible examples, because the work is generally not all that demanding, and the protected status of these workers allow them to figuratively "get away with murder" in terms to avoiding hard work or demanding hours.
5) Consistently high fuel prices (by historical standards) make commuting far both expensive and time consuming. Thus job seekers want jobs that are close to where they live. In decades past, groups of 4-5 people would "car pool" and travel an hour each way to their work, so they could live in lower cost small towns further from the expensive cities.
6) Higher paying factory jobs in large numbers no longer exist, as the USA manufacturing base has shrunk and unproductive, expensive union workers have either been replaced with automation or outsourced to Asia. The jobs available are lower paying service jobs with less attractive hours: retail, restaurant, cleaning, and other service industry jobs. They also carry no "status" and thus are off-putting to previously well-employed and proud trades workers. Plus the trade jobs that remain in the USA have moved (see 5. & 6.)
Real work is "work," requiring a person to get up early, be at work on time, not miss work for routine personal matters and concentrate to learn and use training. We have created a society that isn't ready for "WORK."
THE CULTURAL AND PREPARATION ISSUES--THE SIMPLE WILLINGNESS TO WORK VS. STAYING AT HOME AND LOAFING FOR 99 WEEKS COLLECTING UNEMPLOYMENT IS AT THE ROOT OF THE PROBLEM EVERY BIT AS MUCH AS JOB AVAILABILITY
IS THIS "CHANGE YOU CAN BELIEVE IN?" HELL NO!
Democrats have now controlled Congress for most of the past 3-1/2 years. Their control for the past 1-1/2 years has been dominant. The articulate, inspiring new President has been in office for over 1-1/2 years, and pretty soon, he may have to face the fact that he's made things worse, not better--and he needs to quit trying to blame George Bush for his problems. Remember, he was going to FIX EVERYTHING! I can't believe I am quoting New York Times Columnist Bob Herbert for the second time in a few months, but he says some very astute and correct things in a recent editorial. "The nation is facing a full-blown employment crisis, and policy-makers are not responding with anything like the sense of urgency that is needed." Right you are, Bob. He closes with the statement: "We're not heading toward the danger zone. We're there."
REMEMBER THE THREE STEP PROBLEM SOLVING PROCESS:
1) Understand the problem.
2) Define the problem.
3) Solve the problem.
Far too few government officials have meaningful experience in the private sector, in creating jobs, and fewer still have ever had to "make a payroll." Consider the case of Mitch Daniels, Governor of Indiana. Mitch has considerable business experience. While he's been governor, Indiana has overcome its financial crisis and has a balanced budget. As a state it is more attractive to employers than neighboring Ohio, which has a huge deficit and will be forced to take some kind of Draconian actions to remain financially solvent. Ohio's Governor, Ted Strickland is a former minister/preacher--but perhaps prayer is one of the best solutions when the mess gets as bad as it is in Ohio. His campaign is throwing mud at his opponent John Kasich for being a former Lehman Brothers guy--one of 800 at his level. But Kasich was one of the architects of the budget fixes during Newt Gingrich's "Contract for America" in 1994. Who might do a better job at setting Ohio right? Someone who's done it and knows how, or someone who will "pray" that it gets better--when his every action makes it worse?
REDUCING TAXES ACROSS THE BOARD IS NOT THE ANSWER, & CUTTING SPENDING MUST GO WITH TAX REDUCTIONS
What taxes are reduced is what matters--because some tax reductions will spur much more growth and expansion in the economy and that means jobs, than others. Some tax reductions mostly put more money in the pockets of those who will not reinvest it, and that simply raises the deficit. Cutting government spending will mean jobs go away too. That's why any jobs program and deficit reduction programs must be done in a coordinated manner. If done right, cutting taxes that spur investment in and expansion of job-creating activities will absorb many of those who lose their jobs as government waste is cut. Also, the increase tax revenue from business growth will compensate for the tax revenue lost due to tax cuts, and actually reduce the deficit. These are not trivial choices, and partisan politics can easily mess them up and cause the wrong choices to be made.
JOBS--GOOD NEWS? CHRISTINE ROMER, OBAMA'S COUNCIL OF ECONOMIC ADVISORS HEAD, GOES BACK TO COLLEGE
When she was originally at U. California Berkeley, she discovered and published with her husband, that government spending does not create net new jobs, it actually has the opposite, negative effect, pulling money away from the private sector which DOES create jobs. Maybe she'll find the part of her brain that she left at school when she left to be brainwashed into Obama-economics. Hopefully, when she is no longer beholden to Obama, she and her husband will go back to finding and exposing the truth about government stimulus--it is largely an oxymoron that costs more jobs than it creates. The only government stimulus spending that makes sense is if it repairs and enhances our infrastructure of roads, bridges, and similar badly needed work. That specific kind of spending creates jobs, and has a lasting benefit for all Americans.
UNIONS ARE A LEADING CAUSE OF JOB LOSS
When Democrats are in office and use their political power to support discrimination in favor of unions, jobs suffer. Unions add inefficiency. They add distrust. They add an extra party to every negotiation. And they add far more than their 2 hours a month of pay collected in dues, but insisting on inefficiency in work rules and contract provisions. That's why they are down to 7% of the work force in the private sector. However, they are strangling taxpayers in the public sector. The rampant inefficiency of government bureaucracies is amplified by unionized workers making more money, getting richer benefits and being less productive than private sector employees. Unions are the major reason that job growth in Right-to-Work-Law states is much higher than it is in heavily union influenced states (Michigan, for one example).
HERE IS ONE FORMER CEO'S APPROACH
This will take some time to read, but it is absolutely on target about what has happened, and it is written by one of the technology sectors most respected former CEO & Chairman (of Intel).
[NOTE: To make the figures larger, when you are connected to the Internet, click on the +, at the lower right corner of each.]
Download Andy Grove_ How America Can Create Jobs
OHIO SHOWS THE WAY--HOW NOT TO DO IT-- BY CREATING HIGH PRICED (WASTEFUL) JOBS FOR UNION MEMBERS
Download Misfeasance | The Columbus Dispatch
Follow up report. This director is now claiming publicly, in the media that there is nothing in his job description that says he cannot or should not be biased toward Union members being favored. This shows the incredible CONTEMPT for the costs to taxpayers this causes. The fault for this misguided individual and his waste of tax-payer money lies clearly with the incumbent Ohio Governor Ted Strickland and the Democratic Party principles he follows--and his party's heavily Union-biased contributors who hold him hostage.GOVERNMENT WASTE IS STAGGERING--AND NO ONE WILL ATTACK IT
Of course wringing out waste in government will create still more unemployed people. What needs to be done is to relax the unnecessary regulatory stranglehold on business, lower taxes that provide incentives for business to invest, and create new jobs. Some of the former government employees (those who actually want to work) will land in those jobs. Stimulus spending (what's left of it) should be redirected from "pork and patronage" to a massive public works program to repair and rebuild crumbling infrastructure: bridges, highways, water/sewage plants and so forth. This is one of few government spending programs that actually does create private sector jobs--and leaves a legacy of things in place to show for the expenditure. (Not boondoggles like the idiotic $400MM [not so] "fast train" from Cleveland to Columbus to Cincinnati that averages under 40 mph and requires ongoing state subsidies that equal or exceed the ticket prices per rider.)
REGULATION GROWTH CAUSES JOB LOSS WHEN DONE POORLY
Some regulations are necessary and valuable. Others cost jobs by either demotivating employers or by downright making industries less competitive with foreign competition. This requires skill and an awareness of how "bad regulations" damage the free enterprise system and "good regulations" protect Americans from abuses. Worst of all, the uncertainly of a "limbo"--where regulations are constantly changing, evolving and being redefined,--is a place that paralyzes business decision making and investment. This administration and its various councils and commissions have created a raft of new, onerous and business unfriendly rules and regulations. No recovery comes until some of these are rescinded or removed.
There is no way I can fully address the jobs issue in such a limited space. Hopefully the snippets I have included illustrate why it is not as simple as it seems, and why non-job creating people like politicians and government bureaucrats do such a lousy job of it. There are literally thousands of people like me--semi-retired from business, with the knowledge to help. Why don't the politicians ask for our help? Perhaps they won't like our recommendations?
Best, John
-----------------------------------------------------------
John L. Mariotti, President & CEO, The Enterprise Group, Phone 614-840-0959 http://www.mariotti.net http://mariotti.blogs.com/my_weblog/
------------------------------------------------------------
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