Whiting column: Employment solutions fall between extremes
It’s our personal responsibility to move on.
We should be thankful there isn’t another month of more of the same campaign. Now we must focus on post-election direction.
Most are discouraged because our political parties move to polar extremes on any issue. If one party advocates a position, the other advocates the opposite regardless of merits. Our two presidential candidates mirrored these extremes. Consequently, half the electorate was destined to be frustrated and disappointed to the point of exasperation.
What can each of us do? Don’t fear the extremes. Realize the extremes are the parameters within which good sense abides.
Effective solutions are often hidden between the noise of extremes where politicians are reluctant to look. It is our responsibility to find them and point them out to those in political position. If enough of us do so often enough, our legislators will realize the extremes are inefficient and seldom the best policy and that their constituency has moved on.
It’s not hard to find problems; it’s solutions that are difficult. Upcoming columns will discuss a few that lie within the parameters.
This election reminded us nothing is more important than our ability to earn a living. Trump wasn’t elected because everyone is working. Many have asked, why such discontent when unemployment is 5 percent? The way unemployment rate is calculated hides reality. This rate considers only those not working and actively looking for work. This doesn’t consider several essential categories, those:
• Not on unemployment who have given up looking for work due to over a year of futility.
• Who lost their job and don’t possess the skills or knowledge necessary to obtain another. Pew Research reported that 51 percent of those unemployed hadn’t interviewed for a job since 2014.
• Who can’t file for a variety of reasons, including status and using up their benefit eligibility.
• Recent graduates who haven’t begun looking because they don’t believe they can find a job.
• Who are technically employed but are seeking additional or different employment. Part-time and temporary workers are considered employed when determining the unemployment rate.
These categories make the “real” unemployment numbers a large multiple of the 8 million comprising the stated 5 percent unemployment rate. The Bureau of Labor Statistics states the employed/population ratio is 60 percent, meaning only six of 10 people of working age up to 65 are employed. That means a lot of people want change.
Others are working, but not in their career choice or educational area, which could fuel unhappiness and a vote for change. In 2014, 44 percent of college graduates were working in a job that doesn’t require any degree.
For the first time we have more than $1 trillion in credit card debt, and this doesn’t count the upcoming Christmas season. Credit card spending tends to move up and down with “real” employment.
More importantly, we must remember the unemployment rate is never 4 percent or 6 percent. It’s either 0 percent or 100 percent. You either have a job or you don’t. The unemployment rate is irrelevant to the person without a job.
We spend billions on a variety of social programs, tending to forget the best social program is a job. Not only does a job take someone from being a tax receiver to a taxpayer, it meets our basic need to be productive. No one says, “I’m unemployed. It’s an important job and I’m good at it.” A career provides a route to the fulfillment of a dream, a passion, as well as means to support our family.
Greece and the European Union, with their double digit unemployment rates and average income of $18,096, have proven that government can’t social program its way to prosperity.
Solution: Establish policy and redirect spending to strategies creating jobs and providing a route to one.
1. Tax relief for entrepreneurs. Job creation starts here. Corporations are reducing employee numbers. It’s our responsibility to help by using local entrepreneurs. Online is tempting, but retail is “use it or lose it.” Trying products locally and buying online soon means no store, no employees and higher prices.
2. Lower corporate tax rate to facilitate repatriation of earnings and corporate offices. Why would anyone bank or run their business out of Ireland? A 12.5 percent tax rate. Switzerland is 18 percent with Europe averaging 18.8 percent. Our 35 percent is highest among industrialized nations. The result: $1.7 trillion in corporate profits in foreign accounts. If repatriated it would be taxed and then invested here in business, research and development, or returned as dividends to stockholders.
3. Renegotiate trade agreements and tariffs to our advantage. All countries, including China, need our business more than we need theirs. We are in the power position and should use such to facilitate manufacturing here. We must understand and accept that if manufacturing returns, it also means increased prices. Labor costs will increase by more than 10 times; the cost of production consequently rises, which must be reflected in price. The economic benefit of increased employment would more than compensate.
4. Motivate corporations to stay here. In addition to tax relief, laws preventing a foreign-based corporation from obtaining a federal contract would be significant motivation consequently boosting domestic employment.
5. Require training toward a marketable skill. Redirect spending to college or training expenses of the unemployed. Pew Research identified 11 careers employers can’t fill: degreed sales rep, machinist, nurse, truck driver, software developer, engineering, marketing, accounting, skilled construction, science research, teacher. The common characteristic: advanced training or college degree. End this skills/education gap, and more will be employed.
We must remember the success of nonprofits, charities, support of the arts and even protecting the environment aren’t the focus of someone who isn’t working.
We must role model the words and actions of moving from the extremes to good sense solutions. If we move there, politicians will soon not have a choice but to follow suit.
Bryan Whiting believes most of our issues are best solved by personal responsibility and an understanding of nonpartisan economics rather than by government intervention. He is retired after 40 years of teaching marketing, entrepreneurship and economics.