Unemployment in June was up to 9.5%, according to a Labor Department report released today. 467,000 jobs were cut. The job loss was higher than expected. Associated Press reported the sobering news as follows.
"Employers cut a larger-than-expected 467,000 jobs in June and the climbed to a 26-year high of 9.5 percent. Workers also saw weekly wages fall, suggesting Americans will have little appetite to spend and the economy's road to recovery will be bumpy.
The Labor Department report, released Thursday, showed that even as the recession flashes signs of easing, companies likely will want to keep a lid on costs and be wary of hiring until they feel certain the economy is on solid ground."
The economic crisis is, of course lasting longer than had been anticipated. The Obama administration has been throwing money hand over fist at problems that have been developing for a long time. The problem with government solutions is that they rely on either printing money or squeezing it from taxpayers. When the budgetary appropriation is gone, the job it created goes with it.
Even a lousy, underpaid job stacks up pretty nicely against a government check. The best social welfare program is, in fact a job. The government can not create enough jobs to employ even a significant fraction of America's people. In order to even pay its existing payroll, it is dependent upon individual taxpayers and businesses. What the government can do is to create a climate in which investors and entrepreneurs are willing to hire and pay workers decent wages.
A constructive sort of stimulus package would be extensive tax breaks for those who create new jobs. It is a lot cheaper to forgive payroll taxes in a tough stretch than it is to pay a lengthy stretch of unemployment for laid off workers. Corporations that hire American workers should get hefty tax breaks. Those who hire overseas should get no tax breaks. Anyone who lays off American workers to hire overseas should be socked with punitive taxes for increasing the burden on unemployment and various forms of public assistance. There are many companies that are hiring highly skilled workers from overseas to come to America on temporary work visas. Many such companies advertise insultingly low wages in American newspapers and ask for foreigners when they "can't find" American workers who are qualified. A 200% payroll tax on the company that "can't find American workers" in which they pay the government two dollars for every dollar that goes to an imported worker might encourage them to offer living wages to Americans who are qualified.
A lot of customer assistance jobs are going overseas. Tax rates should encourage the hiring of American workers for these positions as well. It has become almost impossible to find electronic goods made in America. We have become a country that ships its raw materials abroad to be used in manufacturing.
When the price of wheat or copper drops to critically low levels, it is considered a crisis to be solved. No one wants the price of any commodity to drop so low that money is lost in producing it.
Labour is a commodity as much as is tin, pork bellies or corn. Yet we flood the labour market with cheap imports and competition from abroad. The workers who are paid less end up spending less,which further dampens the economy. A certain percentage of workers whose wages are depressed will collect unemployment or food stamps. If they were paid decent wages, they might be paying higher taxes and stimulating the economy.
The money employers are saving with layoffs, outsourcing and reduced hiring comes with a price tag. Our sinking dollar and our economic tailspin are vivid proof of this. Earned money is smart money. Printing money creates far more problems than it solves. It solves no problems at all.
Harry Truman had a sign on his desk that said, "The buck stops here." Obama's economic policy reminds me of an old bumper sticker. "I can't be overdrawn. I've still got checks." Sphere: Related Content