The U.S. job creation machine is sputtering, and Washington seems at a loss at how to fix it. The usual recession-fighting tools - spending increases, tax cuts, dramatically easier monetary policy — have been tried. And even if that were not the case, Republicans and Democrats would probably be ideologically deadlocked over what to do next.
The Obama administration is reportedly considering a temporary cut in the employer share of the Social Security payroll tax. This has the advantage of being potentially acceptable to Republicans, and it might encourage a few businesses to hire people they would not have otherwise. But, in a country that produced barely 54,000 new jobs in May - and needs another 21 million to return to pre-recession unemployment levels by 2020 — it’s no panacea.
Like other fiscal and monetary tweaks under debate, a payroll tax cut would address cyclical joblessness: unemployment attributable to the collapse in demand brought about by the financial crisis of 2008. Yet the problem is also structural. It’s due not just to the latest downturn in business conditions but also to broader, more lasting changes to the U.S. and global economies. As a new report from the McKinsey Global Institute notes, technology increasingly enables companies to cut costs in a recession through permanent layoffs; the growing global middle class can do many jobs that once had to be performed in the United States. Difficult as it has been to develop a counter-cyclical economic policy that works, the United States also needs to meet these structural challenges.
Fortunately, the McKinsey report implies that progress against structural causes of joblessness may be easier than countering the business cycle. There are practical solutions to suit every ideology.
The U.S. economy faces a huge challenge to employ its growing population in the coming years. Its advantage, as always, is the talent of the American worker. But it will take a lot more pragmatism to make the most of it.
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Comments (22)
Add commentRecovery =
the traditional means of re-starting after a recession are not working this time because businesses are investing more in technology than staff; and they are moving jobs overseas - so they can have more profit. Some corporations are sitting on lots of cash, but not hiring. Those who are employed are twice as productive as before, but not being rewarded for that.
I would like to propose a new definition of 'patriot' - someone who invests in their country.
"Some corporations are
"Some corporations are sitting on lots of cash, but not hiring"
Gee, I wonder why?
I wonder if there is any
I wonder if there is any correlation between the shrinking labor unions, and increased productivity?
Joblessness
I think there are reasons why our economy is in a vacuum. One is illegals, and I don't neccessarily mean Mexico. If our government was serious about getting rid of the illegals, instead of amnesty, I wonder how many jobs would open up. Then there is volunteering. I don't mean to bash volunteering, but it seems that many businesses that once hired for a paticular job, now ask for and get volunteers. Another reason is as stated before; increase in workload but no increase in pay. My job has not seen a raise in 3 years but my workload has more than doubled. And of course as long as our government promotes jobs overseas, where does that leave the American public?
not labor unions
the people I know do NOT work for unions and they have nearly doubled their work load...........they work for large corporations. Time to quit blaming the unions for everything.
What's needed to restart the
What's needed to restart the economy is to put more money back in the hands of the working class so they can buy things besides the absolute necessities.
That won't happen as long as the Republicans cling to the three times disproven "Trickle Down" theory. They seem to think that the fourth time is the charm.
Didn't the Republican Noise Machine crank out an email claiming that insanity was doing the same thing over and expecting a different result? I guess that's just more Republican transference.
We need to value the American worker as much as the shareholder
I spent some drive time with a rightwing friend recently. He went on and on and on about unions breaking the nation and how workers were getting paid too much. He happened to start talking about a certain fruit drink factory that we were driving by and how the unions were breaking it.
It just so happened that this same factory was in the news last winter. It was the factory that despite showing a decent profit was planning on reducing wages (except for management of course).
My friend thought that was a great idea. It didn't matter to him when I said the company was showing a very respectable profit. He said if the workers didn't like it they should find another job. In his opinion the company's only goal should be to maximize profit and shareholder value.
Then I explained to him that when the company lowered the wages and moved that money out of the area into the pockets of the CEO and distant shareholders the workers had less money to buy his product. His business has been very slow for several years.
That seemed to surprise him.
We can only redistribute so much of the nations wealth out of the pocket of the working American and into the off shore accounts of the wealthy before the economy grinds to a halt.
again, union attacks will not explain excessive CEO pay
$78 an hour for drunks, well sleepy boy we certainly can see your brain power at work here.......go back to bed....
you CANNOT say that all working people are union, they are not, it's a minority - and that the hard working middle class is getting ahead, that is what is stalling the recovery - stagnant wages, rising health care costs, fear of job loss, people working 60 hours a week for 40 hours pay, etc. etc.etc. All common now.
If we want to compete with CHINA, well, slave labor is probably something most corporations crave, but it is not good for America.
Without a middle class corporations won't have anyone to SELL THEIR GOODS TO. Bottom line.
Republican worldview?
I watched all 2 hours of the GOP Presidential debate last night............painful. 7 of the GOP best were on stage.
Worldview? Hate gays, Muslims, immigrants, loves war (except for Ron Paul) and big business.
Good Luck with that and convincing 'the middle' to vote for more tax cuts for the rich (where IS that trickle down after 10 years of tax cuts for the rich??) and cutting health care for the middle class and poor.
There's an excellent opinion
There's an excellent opinion piece in the Star Tribune that nails the conflicting claims of the fascists.
'It's Obama's fault because he hasn't created any jobs' vs the message coming out of the other side of the fascists mouth that 'government doesn't create jobs'.
Which is it? Does Obama create jobs or not? Make up your mind.
I posted the link to the piece here last night but it was censored.
After decades of tax breaks for the wealth that has robbed this economy of spending money where are the jobs? In China? India? or did they just hide the money in offshore accounts?
Yes
The government can create jobs, but it goes against some folks' philosophy of what the government's role should be. Just like during "The New Deal" the government could repair infrastructure, roads, sewer systems, schools, libraries and parks to create jobs. I am for that to create jobs for the unemployed for needed projects.
minnesnowda
I watched the GOP debate, too. Who was the winner?
"Hate gays, Muslims,
"Hate gays, Muslims, immigrants, loves war "
"conflicting claims of the fascists"
"slave labor is probably something most corporations crave"
Wow. Some pretty sad statements here. Says a lot about the folks who write them, though.
wolfg, I suggest you watch the debate......
and draw your own conclusions then.
Comments after the debate show Romney first, the other candidates did not attack him, which was interesting.
Timid Timmy backed off his attack on Romney Sunday about Obama/Romneycare.
Michelle Bachmann jumped into the race last night. To people who do not know her and some of the kooky things she's said and done..she appeared smart and sane. Interesting. She made a good showing, which will scare off Palin.
Corporations exist to make a
Corporations exist to make a profit for shareholders.
According to the True Patriots here they have no obligation to give anything back to our country. They have no obligation to provide a liveable wage and keep our economy moving. They have no obligation to conduct business in a sustainable manner. It's all about the one and only true god of the fascists and that's money.
Strip mine, declare bankruptcy to protect the shareholders and leave.
Clearcut, don't replant, sell the property, distribute the profits to shareholders and leave.
Tell your employees how to use the public health system and distribute the saved money to shareholders.
Snowda, I watched part of
Snowda,
I watched part of them. Missed the second half. Fell asleep.
"They have no obligation to
"They have no obligation to provide a liveable wage"
You libbies constantly bring up the "liveable wage" thing. Yet, you always refer to folks like Hope on the other page. Entry level jobs are just that, and many businesses start folks off above the minimum wage. Working the drive through window at McD's, is a stepping stone and one should not expect to be able to support a family of 4 comfortably on that salary. However, liberals seem to feel that if the company makes a profit, it should be equally distributed. Preferably from the bottom, up, and that they have a responsibility to ensure every driveway has a new car, and every living room has a 52" plasma TV. They don't.
Fish, we all know you hate the stock market. Most likely because you don't understand it. I can either let my money sit in the bank, or I can invest it in something. If I risk my cash in any sort of company, or even a municipal bond, shouldn't I expect some sort of return? Possibly even a bit higher than average return if the risk is high? You win some. You lose some. Hopefully you win more than you lose.
The business community is very smart. Cash will sit on the sidelines, and the economy will not turn around until the rabid dogs are called off, and the uncertainty in the current business environment is reduced/eliminated.
BTW - I have a friend who
BTW - I have a friend who started working at McD's near the end of high school, and now he owns 4 of them. He could have sat around and complained about how "the man" was keeping him down, but...
Republican worldview?
I watched a little over an hour of the debate, and I did not hear any of the candidates state that they hated gays, Muslims, or immigrants. Did one of the candidates say these words in the first hour?