Unemployment and underemployment in the US is between 15% and 20% of the workforce. I favor the higher number because I suspect many, many people who could be productive and want to work simply believe that no meaningful work exists that can cover the costs of working. This problem took a catastrophic leap upward in the recent Great Recession
The Great Recession was caused by the Panic of 2008 which was in turn caused by the financial vikings on the Street and in the hedge funds; the hedge funds were funded by the wealthy wanting more money without making productive investments. But the causes are not part of the solution; they are mostly irrelevant.
The solution is ... a combination of policies, of course. No silver bullet.
The Job Solution
I. Stop taxing jobs, completely. That means no more taxes paid on employment income for Social Security, Medicare, unemployment benefits or any other direct or indirect tax on jobs. This will make the cost of hiring people much lower.
II. Eliminate the connection between health care and jobs. That bond prevents people from changing jobs to move on to either better jobs or starting their own businesses. It also increases the cost of employment enormously.
III. Social Security, Medicare AND a new National Shared Heath Care Benefit will be funded by a new Value-added or Sales tax on goods (especially imported goods) and many services (especially imported services). Consumers of imported goods and services now get a free ride - they are freeloaders. Make them pay a fair share to support the American System.
IV. Eliminate all tax subsidies for equipment and machinery (accelerated depreciation, etc.). Eliminate the overseas income tax loopholes. Eliminate tax loopholes for hedge fund managers.
V. Eliminate tax deductions for any compensation above the salary of the President. This will lower the costs of employing many people at middle income wages/salaries vs. the executive suite.
VI. Require compensation committees of corporations to have a majority of true outsiders nominated and drawn from the ranks of INDIVIDUAL shareholders. Require all corporate votes to be secret ballots.
VII. Require any incentive executive pay to have clawback provisions and to included the effects of ANY so-called nonrecurring losses. Require mandatory stockholder votes to approve ANY incentive plans offering pay in excess of the President's salary. These votes are binding. For any plan that loses, the compensation committee is fired and a new committee is formed.
VIII. Require any corporation wishing to bring in immigrants for so-called "hard to fill" jobs first offer the job broadly at a 10% pay increase AND offer job training for any special requirements; provide an arbitration board to protect against unfair or excessively tailored job descriptions.
IX. Eliminate all Federal & State regulations that kick in at some number of jobs, like 50. Those hold down the number of jobs and encourage using high paid employees supported by machines, vs. simple jobs for more people.
X. Eliminate the R&D tax credit and replace it with a Job Training credit.
All these policies will lower the cost of hiring people and increase the demand for people vs. machines. that's what we want. And it frees the entrepreneurial energy of millions of people stuck in dead end jobs with "benefits". The Job Solution will permanently lower the unemployment and underemployment rates. Entrepreneurs will be more free to hire people as hiring becomes simple and direct, with no red tape. The cost of replacing people with machines goes up. By equating the W-2 worker with the 1099 worker, employers will want to hire more people to lock in their services; there will be NO benefit to keeping people on 1099 contracts.
Education is part of the job problem. It's also part of the transportation problem. I will address those matters next week.
Any global warming Kool-Aid crowd: check this out ->
A data stake into the heart of AlGore's propaganda machine.
Word of the Day
"Mimetic" - adjective [$10]
Mimetic means relating to or habitually practicing imitation or mimicry; 2. (Biol.) of or relating to mimicry.
Sentence: The American "leaders" must stop acting as being mimetic is not patriot; stop the "not-invented-here" syndrome. We have a lot to learn from GERMAN employment and education practices. GERMAN unemployment fell to a record low not seen since reunification in 1990. Let's analyze GERMAN policies to see which can help here.