Tuesday, May 10, 2011

How to Get a Job

     In my last blog post I complained about the lack of jobs, especially the lack of decent jobs in our American economy. I admit to a certain personal interest in this. I've been one of those underemployed individuals since the last recession in 2002. Going on ten years. I don't work in construction, real estate or finance, so the housing boom of the 2000s did me no good.

     I'm not counted in official government figures for the long-term unemployed. I'm deliberately overlooked. So are a number of my friends who have been struggling along with occasional consulting jobs or freelance work, at a small fraction of the salary they used to make when they were middle-manager types.

     So I thought, maybe I should see if I could come up with some ideas for improving the job picture, since I'm the one complaining about it.

     Uhhh ... this is going to be a short post.

    But I'm not the only one with no ideas. Certainly the Republicans didn't have anything that worked very well, relying on old-fashioned trickle-down economics. They gave tax-breaks to the rich, in the hopes that rich people with even more money would somehow start hiring more employees. Maybe a few extra butlers and chauffeurs did get hired, but it didn't make a dent in the unemployment rate.

     The other Republican idea was to give the banks lots of free money, again hoping they would make loans to home buyers and car buyers who would in turn spur production in the auto business and the construction business. This maneuver did help out the car companies a little bit, at great cost, and Ford and GM have hired back a fraction of the workers they laid off in 2007-08. It has not worked for the construction business, since the only people buying real estate are investors taking advantage of desperate people behind are on their mortgages. And the few regular people who want to buy a house usually find they don't qualify for a mortgage from banks that have suddenly made their lending standards tighter than a rusted screw.

     Banks were also supposed to lend that free money to small businesspeople to expand their businesses and hire new workers. The trouble is, most small businesses are not interested in expanding in a weak economy. So instead, the bankers pocketed the money as "bonuses."

     If the Republican ideas for creating jobs were old, inefficient and largely ineffectual ... well, at least they had ideas. The Democrats have no ideas at all. They've simply continued with the Republican policies -- giving free money to the banks, extending tax breaks for the rich, keeping interest rates artificially low. Why should we be surprised? The architect of the Democratic strategy is the same as the architect of the Republican strategy -- Ben Bernanke.

     I happen to like Mr. Bernanke, and I think he's a very smart man. I felt the same way about Jimmy Carter.

     One thing the Democrats have done is debase the dollar, and that does seem to have helped a little. When the dollar is worth less, American goods are cheaper abroad, so it's easier for our companies to sell their products and services around the world. The export business is up, and employment is up too. Computer companies, which do a lot of business overseas, have been making money and hiring people. As MerCyn pointed out, just yesterday the Wall Street Journal reported that California's information technology sector added 5.3 percent more jobs in March. And a company like Caterpillar, which sells farm equipment around the world, has seen its profits grow as tall as Midwestern corn -- and Caterpillar has been hiring. Just one small example: Caterpillar is currently signing up about 600 people to staff a distribution center in Ohio.

      All these efforts have produced some growth in employment. As I pointed out in my last post, the American economy last month created 244,000 jobs, the third month in a row that businesses have added more than 200,000 new jobs. But as I also pointed out, after a precipitous three-year decline, we have a long, long way to go to get back to a vibrant economy that will provide opportunities for ourselves and our children. Experts have estimated that at the current pace of job creation, the economy won’t return to full employment until 2018.

     So what else can we do? Bernanke will probably continue to lower the value of the dollar to increase our exports to the world. That's a good thing. We should probably lower taxes on American corporations (rather than increase them as some liberals are saying), but that should be coupled with some sort of incentive program to hire Americans rather than people in other countries. We could (but probably won't) lower the payroll (aka Social Security) tax. After all, every employee costs a company an extra 7.5 percent for its share of the payroll tax, and it's just one more reason not to hire on another person.

     And speaking of the "extra" costs that companies take on when they hire an employee, one significant way to encourage corporations to hire more people would be to get the health insurance gorilla off their backs -- by converting to some kind of national health-care system.

     As for what you and I can do -- well, it seems that education and training are the keys to a decent job. I know (again as I reported in my last post) that the New America Foundation, in an April 2011 report called "The American Middle Class Under Stress," claims that our underemployment is not due to a lack of skills, but to the new structure of the job market. The report cites people with college degrees doing jobs for which a college degree is not necessary -- including one out of every eight waiters and waitresses, and more than one out of eight parking lot attendants.

     Nevertheless, I also saw a news report on this year's college graduates in California. Kids graduating with engineering degrees are getting an average of three job offers each. Not too shabby.

     It reminds me of the old joke about the theater major coming out of college, asking what lines she should learn -- and the response was:  "Would you like fries with that?"

     It seems obvious, but our kids are not listening. They should not automatically jump into a liberal arts college. They should instead consider a vocational school that teaches them a real skill. If they do go to college, they should not major in sociology, women's studies or theater arts. They should major in engineering, information systems or nursing. And learn another language like Spanish, German or Chinese.

     When I met B a few years ago, I had just lost a job, and she had just lost a husband. At the time, I thought about going back to school. But I felt that I had paid my dues. I was tired of working, and I sure as hell didn't want to start over. Now, seven or eight years later, I'm doing essentially the same work I did before I lost my job -- except I'm doing it part-time, at half the price, with no benefits.

     B, on the other hand, decided she would go back to school. She worked part time, and took classes in the evening, and there were times when she wondered why she was doing this at her stage of life. But she persevered, and at age 55 graduated with a master's degree. Now she has a new career ... with health insurance, vacation time and all those other benefits we used to have.

     So don't ask me how to get a job. Ask B!


Kay Dennison said...

Interesting!!! I'll spare you my thoughts/experience in this arena because it was a nightmare.

Retired Syd said...

As usual, a thought provoking post. I can't say I have any bright ideas about job creation either. I suppose if there was a easy answer, someone would already be implementing it.

I really appreciate your comments about the lower dollar. I think most people don't understand how that actually helps us (with exports). Thanks for the refresher course in Econ 101--I appreciate it.

Dick Klade said...

Some interesting thoughts, once again. How about a solution way outside the box? Perhaps it is time to rethink this whole import-export thing. Because Ameica is the best market (big population with lots of money to spend) in the world, we might be way ahead of the game if we slapped high tariffs on all imports and geared our own industry toward primarily selling to fellow Americans. That ought to retain and create many jobs. We would eventually export much less, of course, as other nations retaliated, but many of the others could not shut us completely out of their markets because we make some high-tech items vital to them, and we have agricultural surpluses that they simply must buy.

We started as a country heavily dependent on exporting (cotton, tobacco)to get goods in return that we could not manufacture. We no longer are in anything resembling that sort of situation. Perhaps it's time to head into the 21st century rather than staying in the 18th economically.

schmidleysscribblins.wordpress.com said...

Perhaps no good ideas, but lots of bad ones. like riddding ourselves of incandescent light bulbs. The last plant in VA closed, and the jobs went to China. Now we still buy the bulbs because the others are so dangerous and don't save that much energy, if any energy at all, and the incandescent bulbs are not made in the US. Oh that was brilliant!! Regarding the dollar. History shows it is not smart to devalue your currency, it would be much better if the Chinese let their yuan float higher.

Linda Myers said...

I especially agree with you on sensible college majors. But it's been my experience that the young usually don't have a long-term strategy, and they usually don't listen to suggestions by older people.

The three people I know currently going to nursing school are my 57 year old sister, my 34 year old son and his girlfriend. No one younger.

Anonymous said...

Oil can only be purchased in American Dollars. The less the dollar is worth against other currencies, the more worthless American dollars must be rounded up to purchase a barrel of oil. The reason why we are paying more at the pump is due to our worthless American dollars that Ben Bernanke and Obama are so intend on debasing.

Do you have a degree in economics?

How can there be any job creation going on in the United State when you have the American government constantly constraining American corporations with taxes, law changes, enforced heath care and interference?

The best run American corporation is GE (Obama's best friend). That American corp paid no taxes by hoarding and keeping their profits overseas, as well as jobs. Catepillar is laying off people in droves. Again, I really don't know where you get your information but I think you need to resharpen your pencils.

As far as anyone buying American exports because the dollar is cheaper....if that were true our manufacturing plants would be humming 24/7 by now. Are they? Name 5 products we export through sales????

Keep your day job. America is a much safer place.

Anonymous said...

To further prove my point, this just released from both the Wall Street Journal & NY Times:


The price of oil is destroying our exports. All due to the devaluation of the US buck, Yup, that Bernanke is a genius alright. A regular Mr. Potter.

Dick Klade said...

Hey, Anonymous: I don't know whether "Sightings" has any formal training in economics, but I do know from reading several posts that he talks sense. It would be nice if you would present your views without questioning the qualifications or motives of other commentators unless they introduce them into the argument.

By chance, I read that NY Times article. It talked about our trade deficit, not Just our exports, which actually rose during the time the authors were discussing. The connection to your point is not readily apparent.

Sightings said...

Hi Anon., thanks for your comments. I do not have a Ph.D. in economics (like Ben Bernanke), but I did minor in economics in college and went on to get an MBA degree. So I know a little something ... but only enuf. to open a discussion, not enuf. to provide the final answer.

I agree there's plenty to complain about when it comes to the American economy, but I was trying to focus this post on employment. And, like I say, I realize I'm not the expert in that area. B (my better half) is -- because she actually got a job!

For my take on the oil situation, see my March 23 post called "Are Gas Prices Really That High?"

As far as the dollar goes, I concur that in an ideal world it's better to have a strong dollar than a weak one. But it's not an ideal world. So I guess I side with those who say the first priority is to breathe some life into our economy. Then after the emergency is over we can worry about longer term issues like the debt and the dollar.