Sign in | Register now | Like us on FacebookLike Us | Follow us on TwitterFollow Us

Milwaukee's Daily Magazine for Monday, Sept. 1, 2014

Mon
Hi: 80
Lo: 63
Tue
Hi: 79
Lo: 61
Wed
Hi: 81
Lo: 68
Advertise on OnMilwaukee.com

Readers Blog

The Truth About Jobs

With official US unemployment at nearly 8% of  the workforce, and many  part-time workers need to work full-time, everyone wants to create more jobs in America.  There are about  133 million jobs  in this country now, down  3%  from about  137.6 million in 2008. (1)  Yet the American Gross Domestic Product  (GDP)  is  UP by 2.5 %  (in constant dollars) over that same period!  If the economy is expanding, why aren't  jobs expanding too?

1. Computerization and Robotics:  Not only is manufacturing done more efficiently by machines than by humans, but even service workers, such as  secretaries and receptionists, are  now being replaced by  word-processing  programs and computerized  telephone answering "trees."  Call any business with more than about ten employees, and  your call be answered by a computer, and you will be lucky to even be connected  to a real human being! Despite  long-term inflation, the cost of computers has actually fallen over the past forty years, and even the smallest firms are using them.

2. Globalization: If an employee cannot be replaced by  a computer or machine,  an Asian employee  will  be cheaper than an American.  This is true not only for manufacturing, but also for  telephone customer service.  Call for computer technical support, and I will bet that  the respondent will  have an Indian accent.

3. Temporary, contract and part-time employment:  Even when business is so good that  a firm needs more  staff,  it will often be more  advantageous to  use an employment agency than to hire workers.  One reason is that  "small businesses" (fewer than 500 employees)  are eligible for  Small Business Administration (SBA) loans and other assistance, and workers employed through an outside agency do not count toward that total.  In addition, temporary and part-time workers  can be added and dropped more easily if they are actually employed by an outside agency.  Even the US Department of Defense had more contractors than soldiers in Iraq  during the war.

4. Skills Gap:  As the American workplace becomes increasingly  high tech, the need for unskilled workers continues to decline.  Once a typical high school graduate could get a  good entry-level job at a local factory, but today many of those jobs have been shipped overseas or otherwise eliminated.   In today's economy, without a college degree or  specialized  post-high school  training (such as web-design, dental hygiene or auto repair), there are not even enough menial jobs to go around.  Moreover, in cities like Milwaukee, most young men are not even high school graduates!  Even a  big  increase in the total number of jobs will do nothing for those who are not prepared for  today's  workplace.

Therefore stimulating the economy through deficit spending by the federal government has only a marginal effect on  unemployment.  The US Government can create  public service jobs, either directly or through grants to states and cities, but that will drive up the deficit, which is already too high .  Only  policies that  significantly impact the  four trends cited above  can dent the  unemployment problem.  Given the divided government  that voters have just  re-installed in Washington,  such structural changes are very remote.

Gerald S Glazer

-----------------------------------------------------------------------

(1) US Bureau  of Labor  Statistics.

 

Disclaimer: The opinions expressed in this and other user-submitted content do not necessarily reflect the views and opinions of OnMilwaukee.com, its staff, its advertisers and/or its partners. This user-submitted content has not been checked for factual accuracy, and any photos uploaded have not be verified to be copyright-free. It is the user's responsibility to post text and/or photos that belong to that user and do not violate any copyright or intellectual property laws. If you feel this content is abusive, offensive or otherwise inappropriate, click to report and we will review this blog entry.

Rate this:
  • Average rating: 0.0
  • 1
  • 2
  • 3
  • 4
  • 5

Talkbacks

solitarius | Nov. 10, 2012 at 6:25 p.m. (report)

The reason why jobs have decreased 3% while GDP has increased 2.5% over the past 4 years is because ours pulsation has increased 4% over this time frame. The USA needs a 3% GDP growth rate per year in order to accomodate our population growth.

Rate this:
  • Average rating: 0.0
  • 1
  • 2
  • 3
  • 4
  • 5

solitarius | Nov. 10, 2012 at 6:07 p.m. (report)

Correction and addition of previous post.

Correction: I meant WWII, not WWI , this was a typo.

Addition:
2. Globalization - Globalization is non-denominational, it works in our favor as well as that of other countries. Yes the I-Phone is made in China, but Toyotas are made in the USA. When it is economically advantageous to make a product in a particular country, that is where it will be made and should be made no matter who owns the company. The way for the USA to compete in the world market is to have laws that make entrepreneurship easier and more profitable. There is no other way.. So when our taxes on business are one of the highest in the world this does not foster economic growth. The solution to the problem is obvious.

4. Skills gap - there is no such thing. Currently 50% of college graduates cannot find a job. The problem is not lack of skills it is lack of jobs. Increasing the number of skilled people for no jobs is only a great way to increase the unemployment rate. When the jobs become available people will get the education and skills they need to fill them.

Rate this:
  • Average rating: 0.0
  • 1
  • 2
  • 3
  • 4
  • 5

solitarius | Nov. 9, 2012 at 2:06 p.m. (report)

Mr. Glazer seems to think the modern world began in 2008. A 3% growth in GDP in four years is anemic, the worst recovery since WWI. We have lost jobs not because of the factors Mr Glazer writes because these very same factors were in place five years before, i.e. from 2003 to 2008. Nothing significantly happened in the job market, workplace, education, etc in those five years. However, between 2003 and 2008 the jobs increased from about130 million to over 137 million when the GDP increased not 3% in total in 4 years as during Obama's term but 3% per year for 5 years.

Mr Glazer seems to be suggesting that there is no relationship between GDP and jobs, but the statistics state just the opposite. For example, during Reagon's terms after his growth policies took effect in 1983 the GDP went to about 8% and over the next five years averaged close to 5% and the jobs during his terms went from about 91 million to 108 million.

Mr Glazer does not seem to know where jobs come from. They don't come from the bottom, they don't come from increasing skills or education, and globalization does not reduce jobs it increases jobs. Jobs come from entrepreneurs who are willing to risk their own money to make more money. Stimulating the economy by freeing up entrepreneurs to do their thing is the ONLY way to create jobs and after jobs are created then GDP increases.

This is very clear from the statistics. During Clinton's term there was a great economic boom in the dotcom industry that significantly increased GDP and thus created jobs as well as a surplus. However, when this boom went bust in the last year of Clinton's term the surplus dissapeared, the GDP fell, and jobs dispppeared. Bush stimulated the economy by stimulating the entrepreneurs to create business by lowering taxes for everyone and business and the economy responded by increasing GDP as well as jobs as the stastistics I quoted above prove this.

The point is that there is no reason to do anything Mr Glazer proposes or is concerned about. When entrepreneurs are released to do their thing they will create jobs no matter what the companies in India or Chinas are doing and the people who want those jobs will get the education in order to fill them. The people themselves will respond as they always do because everyone wants to succeed. All they need is the job to fill and the only people who can provide those jobs are entrepreneurs.

Mr Glazer seems to think we need government to lead the way, when the TRUTH is the only way for us to succeed, and history has proven this over and over again, is for the government to get out of the way.

Rate this:
  • Average rating: 0.0
  • 1
  • 2
  • 3
  • 4
  • 5
Post your comment/review now 3 comments about this blog.
Post your comment/review now

Facebook comments

Disclaimer: Please note that Facebook comments are posted through Facebook and cannot be approved, edited or declined by OnMilwaukee.com. The opinions expressed in Facebook comments do not necessarily reflect those of OnMilwaukee.com or its staff.