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  • No Incentive To Hire

    America is in big trouble. Yes, you can talk economy, debt and deficit, but the real problem is jobs – Americans are out of work and looking for jobs that some are not there, and others that are never coming back.

    America is in trouble: the biggest trouble America has is it doesn’t know how much trouble it’s in. Yes, you can talk economy, debt and deficit,but the real problem is jobs – Americans are out of work and looking for jobs that some are not there, and others that are never coming back.

    Friday’s monthly employment report, illustrated a net gain of merely 18,000 jobs, which is breathtakingly bad: America labor needs almost

    Upstart: Business and Management for 20-40 Year Old Professionals

    300,000 jobs just to get to prerecession levels, so the June report – showed that not only is hiring not happening – American leaders don’t know how to make it happen. The corollaries of this: you can’t expand the economy with a robust consumer market, nor can you create revenue for deficit and debt reduction without those additional tax payers.

    Daily Beast reporter Zachary Karabell states in his article, Jobs Aren’t Coming Back, “Two years after the official end of the recession in the summer of 2009, the unemployment rate remains high (9.2 percent), and the unofficial underemployment rate of part-time workers, multiple job workers, and “long-term discouraged workers” is even higher (mid-double digits). If anything the situation looks to be getting worse, not better. Recent reports have shown that state and local governments are shedding workers, and government overall accounts for nearly 17 percent of all jobs in the United States. With looming cuts to the federal budget as part of a potential debt-ceiling deal and with states shaving employees from public payrolls, the direction is down for government employment and static at best for everything from technology to services. Even health care, one of the prime sources of job creation of late, is coming under pressure as mounting costs and shifting regulations begin to have impact…In fact, there has been almost no net job creation in the past year, according to the Bureau of Labor Statistics, with about 139 million people employed in June 2010 and about the same now. There are, by the way, many issues with how these numbers are compiled (based on telephone surveys and adjusted by statisticians with complicated formulas meant to compensate for seasonality and other factors). But they do provide an indication of overall patterns of employment, and those patterns are clear: job creation is not happening, and there is little indication that it will.”

    The real problem: companies have no incentive to hire. First, companies, big and small, have learned to do more with less, so yes workers are stressed and strained to the breaking point, yet profits are more than they’ve ever been, because businesses are eliminating human capital, which is the biggest expense.

    Karabell adds in Jobs Aren’t Coming Back,”First of all, it’s clear that companies can make a lot of money with no need for extra bodies. Corporate profits continue to rise at a double-digit rate, and as the companies of the S&P 500 report their financial results in the coming weeks, that reality will stand in stark contrast to employment and wages that remain stagnant. Even when companies do open factories in the United States, they need hundreds of highly skilled workers to manage factory floors that are increasingly sophisticated and mechanized where they might have needed thousands upon thousands decades ago. Lowering tax rates, and thereby increasing the amount of cash in individual and institutional hands, won’t help. There is no dearth of cash on hand for many companies and many wealthy individuals; yet they aren’t using that cash to hire.”

    Secondly, local, state and federal agencies are not incentivizing a worker program, where companies get subsidies to train and hire workers. This subsidy should also address and stabilize the health care and tax issue once and for all.

    Lastly, America has to be more of an exporter than importer: we have to “build things” that other people not only want: that they find valuable.  America cannot come back until it address with real solutions the contributions long-term jobless Americans cam make within the economy, within the mortgage market and with revenue enhancement (taxes).

    The position of Upstart: Business and Management for 20-40 Year Old Professionals: the real problem is politics: politicians are focused on election cycles, as opposed to value or excellence – definitely real-time – real-world solutions, so the ruthlessly stubborn unemployment rate has not been addressed with the immediacy, seriousness, sensitivity or innovation that it deserves.

    It’s becoming too late – way too early.

    Good Luck.

    Calvin Wilson
    Founder and CEO
    Upstart: Business and Management for 20-40 Year Old Professionals

    Filed Under: Career


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