Job Growth lagging still; pundits perplexed at paltry pace

And the Nov. and Dec. jobs numbers were revised lower.

 

Why does job growth hate America? Sorry couldn't resist.

 

You know, I don't completely blame Bush for the labor market.

I do, however, hope that economists are busy with pencil and paper, figuring out updated theories for the interelation of markets.

I don't think the health of the stock market has much to do with domestic labor health these days. If anything, since outsourcing is so efficient, the two markets may be inversely related at present.

It's not my field, but again, I just don't see how corporate profits automatically will lead to a coming growth of *American* jobs anymore.

 

I blame him for trying to put a spin on it. Bad is good and better is just around the corner. I blame him for using the lagging job market to push through stuff like tax cuts that make the situation worse.

From jobwatch.org...
______________
Bush Administration's tax cuts falling short in job creation
The Bush Administration called the tax cut package, which was passed in May 2003 and took effect in July 2003, its "Jobs and Growth Plan." The president's economics staff, the Council of Economic Advisers (see background documents), projected that the plan would result in the creation of 5.5 million jobs by the end of 2004—306,000 new jobs each month, starting in July 2003. Although jobs increased by 21,000 in the month of February 2004, the "Jobs and Growth Plan" still fell 285,000 jobs short of the administration's projection. The administration projected that a total of 2,448,000 jobs would be created in the first seven months after the tax cuts took effect. In fact, only 294,000 jobs were created over that period for a cumulative shortfall of 2,154,000 jobs.

 

The count of job gains for January was revised to 97,000 from 112,000 and for December to just 8,000 from 16,000.

An average of 42,000 jobs have been created over the last three months. The prior three months showed a 79,000 average. 150,000 new jobs are needed every month just to keep pace with population growth.

The average length of unemployment has climbed to 20.3 weeks, the longest since January 1984.

The malAdministration's OMB macroeconomic forecast put out in December is already off 1.07 million jobs.

 

We're in agreement, fellas. My criticisms of the administration focus on the handling of the current job climate, not in the creation of it. I also think there's ample evidence that the administration cares more about corporate profits than unemployment. The unemployed don't typically make for good campaign donors anyway, I suppose.

 

How do tax cuts make the job losses worse? Do companies hire more workers when they're paying more in taxes?

It's not as if the deficit has made interest rates too high. Could it be that we'd still be seeing negative job growth if not for the tax cuts?

I would probably buy that it hasn't necessarily helped, but I don't see how tax cuts made the situation worse.

 

So, without growth in government, we'd have no new jobs. Sad thing is, if we'd taken the money devoted to tax cuts for the upper brackets and just hired people, sort of like the CCC, we'd be way ahead of where we are now.

 

Good lord, now we've got physicists and lawyers trying to talk protectionist economics here. What a joke. Economic amateurism at its finest. Go vote for Pat Buchanan if this is the way you feel. If you don't understand trade, competitive advantage and specialization of labor then don't talk economics. Period. None of you in this thread do, from the looks of things.

 

Its so funny when you brag on your first year economics course knowledge.

 

A focus on large companies may be part of the problem. Small business is often the engine of the job market. If the climate favors large businesses, it may be that small businesses don't have the ability to expand and hire.

Though they aren't all necessarily small businesses, I can see that businesses in my neighborhood are getting by with fewer workers. Waits are longer for service in the past, empty registers are common despite large lines, etc. Heck, all the local grocery stores (including Wal-Mart) have been adding self check-out lines, potentially making it easier to get by with fewer workers.

It does seem that the entrepreneurial spirit we saw in previous decades is largely missing from the current business climate.

Perhaps part of that is the tech wip-out. For a time, it seemed any crazy company got funded. So many of those went out of business, it may be serving as too big a warning for those who would otherwise be inclined to start businesses. I assume banks and other financing vehicles are a lot more cautious now, as well (and with interest rates so low, they may not feel the risk is worth the reward. Or with the stock market being relatively flat, at best, the potential for an eventual IPO reward are certainly a lot lower than in the late 1990s), making it harder to start businesses.

Continued bank consolodation also makes financing more difficult for new businesses.

I'm afraid the answer to the issues isn't on either candidates' platform. I have yet to see any real attempt to focus on helping small business creation and survival.

 

T_J,

I said I have no expertise here, but I do have common sense. The facts are clear: job growth is truly lagging.

Please 'splain me how a stock market rally can lead to a steady improvement in jobs when companies can be much more efficient by outsourcing? If this sounds protectionist, okay. I'm still for NAFTA and all that.

Personally, I don't know how to bolster American employment without great improvements in education. If our citizens have more know-how (and different know-how) than people overseas, then we can expand new job markets here that cannot grow elsewhere. Right now, we're basically better at foaming milk for lattes, and we might be better at coding java, and we are certainly better at political spin. But that's about it.

Seriously, just give us a thumbnail sketch for what we can expect for American jobs (without referring to one of your "classics"). I am very open to objectively hearing your response. I'm interested in the principles more than the politics, if you can imagine such a thing. Thanks.

 

Like Father, like son.

Jobless recovery=no second term.

 

um.... how about your constant references to Bangalore.

OOPS, did you already forget that you included that in this very thread? Oh my Sam, you are a bad corporate lawyer today. Your proofing and editing skills leave much to be desired. It will take you quite some time to ascend to the role of Senior Proofer and Editor at your lower-tier law firm. So go ahead and .pdf this document, send it around for comments, and then process the necessary changes for the group. Better yet, send around a red-lined version and a clean version. thaaaaaanks

 

mrpaige,

that's a nice, sensible post. Thanks. I do think the tech pop has left people cold to innovation at the moment. And I also agree that neither candidate has yet to offer substantive proposals for sustained American job growth.

T_J, you can disregard my earlier request. Have fun insulting Sam though.

 

Why Outsource?
by Trader_Jorge

1. Competitive Advantage – In a competitive marketplace, if you can not be the best at your job, then you do not deserve to be doing your job. It should be sent to the most efficient location. If you want to keep your job, improve your skills, your technology, your productivity. This is called progress and advancement. Protectionism stifles both by eliminating the ability to hire better, lower cost employees. Employees who can’t keep up and need artificial support in keeping their job (we call these people unions in the US) should be re-deployed to higher valued added positions in order to achieve economic efficiency.

2. Cost Advantage – Outsourcing call center and IT jobs to India saves companies millions of dollars. This enables them to generate higher profits, thereby benefiting domestic shareholders (millions of Americans). Higher profits and higher stock prices means higher tax receipts to the US government as well, helping to balance the budget and pay for government employees salaries. It also benefits existing employees to be retained, in other words preventing further job loss by generating excess cash to pay for American salaries. The savings also allow for more free cash flow which can be reinvested into capital expenditures, paving the way for future hiring needs and greater productivity and subsequent higher salaries.

3. Consumer Prices – The millions of Americans who purchase goods from companies who outsource benefit from lower costs. In a competitive marketplace, the low-cost producer has the ability to take market share by marketing his goods at the most competitive price. These cost savings are realized by the consumer through lower prices, thereby raising the standard of living for Americans. A higher purchasing power for US consumers increases consumer demand, which has the impact of increasing economic activity and creating jobs.

4. Jobs flow both ways – A very high number of foreign companies have jobs in the United States. Look at Credit Suisse First Boston, Honda, Siemens, HSBC, just to name a few. Erecting walls around our economy to prevent outsourcing to foreign counties will also prevent foreign countries from outsourcing jobs to the United States. Bad move.