I was recently reading a U.S. News and World Report article entitled “How to get Americans Working Again,” Mort Zukerman, the author, presented a great deal of helpful data. Indicating that there is no “silver lining to the dark cloud that has enveloped America”, he mentioned that unemployment has moved from an economic setback to a fully fledged catastrophe.
• At least 929,000 men and women who want a job haven’t looked in the past year
• According to the Bureau of Labor Statistics on nonfarm payrolls, there has been a net loss of 589,000 jobs
• 40 per cent of the unemployed, 6.1 million workers have been out of work for more than 27 weeks
• Some economists who have examined the data arrive at an unemployment rate of 22 percent nationwide, a loss of some 8.6 million jobs
• With our potential labor force expanding at 1.3 million job seekers annually, it would take at least six years to reduce the unemployment rate to 5 percent
• Last year’s loss of jobs 3.7 percent was the worst since 1938
• Many people have exhausted their regular unemployment benefits
Recently, I reviewed the U.S. Chamber of Commerce plan to restart job growth in America. There were many observations and several proposals to consider. The Chamber is to be commended for its proposal. Several suggestions were made including;
Removal of trade barriers, expanding exports-I support this concept with two major caveats, jobs must be prohibited from export to foreign nations and trade should function on a level playing field, even if it means renegotiation of some existing trade agreements by the administration might be required.
Elimination of new taxes maintain them at current levels-I respectfully disagree. To provide incentives for U.S. job creation-restoration, there must be a major reduction in federal and state taxes on corporations, elimination of the capital gains levy’s, realizing that anything less is not an incentive for companies to create-restore jobs in the U.S. Martin Feldstein spoke to this need to help job creation in a May 14, 2009 article in the Wall Street Journal on “Tax Increases Could Kill the Recovery”. He reminded voters that “Historians and economists who’ve studied the 1930’s conclude that the tax increases passed during that decade derailed the economy and slowed the decline in unemployment. That was true of the tax on corporate earnings and of the 1937 introduction of the payroll tax. Japan did the same destructive thing by raising its value-added tax rate in 1977.”In contrast to the U.S. countries like Ireland that have reduced corporate tax rates to 12.5% have attracted and created many new jobs and continue to entice new businesses.
Build more roads and bridges with private capital - I support infrastructure improvement if it creates thousands of new jobs specifically targeted to projects of state, regional and national importance. The congress must support the adoption of bills such as HR2521 which seeks to establish a National Infrastructure Bank to direct private and public capital to infrastructure construction.
Boost access to capital across all business categories - I support access for large and small businesses to capital if they are known to be successful in creating-restoring jobs and are managed well. Banks must begin to lend to main street as well as small and large businesses in America. The economist for the National Federation of Independent Business has recently observed that “Capital spending is on the sidelines…Spending on capital projects remained at historic low levels, as did the demand for credit to finance such projects.” In short banks must lend not hold!
Remove uncertainty in economic direction. It is true, as the U.S. Chamber states, government uncertainty in economic direction is not a motivation for large and small businesses to create-restore jobs. The Chamber’s position however that it is opposed to taxing bank transactions, is one with which I fail to agree, unless such legislation prohibits bank pass thru of costs to consumers and small businesses, and banks continue to limit lending. The Chamber’s goal of creating 20 million jobs in a decade, though noble, may not be realistic with its time frame. Ten years is too long for millions of unemployed to wait for jobs. At least however, the Chamber’s plan is a meaningful effort to address the problem.
Presently, the health care reform bill is crowding the need for jobs off the front pages and television screens of America’s news. Healthcare will not matter is our people continue to lose their jobs, This bill is a detour form the real problem needing to be faced. If Washington politicians refuse to address this issue they need to retire and let a common servant get the job done.
As a Republican it is not enough for me personally to be only against something, I must offer solutions that work. I propose the above ideas as a starting place for creating jobs.
Dr. Alan Phillips
Bloomington, IL
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