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Where are the jobs?

Published September 03. 2011 09:01AM

Normally, unemployment decreases during the summer. State and federally funded infrastructure projects account for many fair weather jobs. This year, despite pumping over $1 trillion into the economy, unemployment remains high. The so-called stimulus did nothing to improve our economic situation. I agree with the politicians when they say that pumping money into the economy may have preserved some jobs. Where I differ is that government stimulus jobs have not created the multiplier effect, which leads to greater employment. When a small business hires an employee to do productive work that adds value to the economy and creates other jobs. When the government confiscates our money through taxation and doles it out to their pet projects, the economy contracts causing even higher unemployment. When taxes are lowered, we have more money to spend, which results a better economy and more jobs.

Let me cite an example. Our government is committed to green energy and encouraging conservation. Part of this program is improving insulation in private homes so that they can be more energy-efficient. Most houses can be insulated for $2,000 or less. In Seattle, the federal government provided a $20 million grant of stimulus money to insulate houses. One would think this would be a good stimulus for the local economy. The money is now spent and only three homes were insulated. It cost over $6 million to insulate each building. I did not realize that Seattle was so close to the North Pole. Did they use normal insulation or did they use gold or silver? Another way to look at this project is that it created 14 temporary jobs. Each job cost well in excess of $1 million. If we gave a million dollars to 20 small businesses, I believe we would create at least 50 permanent jobs. Clearly the government has failed in their job creation efforts.

If the government chooses to use stimulation to improve the job market, then businesses that hire the unemployed should be eligible for grants to pay for training and other new job start up costs. The unemployed should be encouraged to return to school or college to enhance their skills. Not only do we need more accountants, doctors and nurses, we also have a shortage of teachers, plumbers, electricians, carpenters and general contractors. Through federal and state grants and subsidies we can retrain workers to fill the positions needed to expand our economy. Community colleges and universities have day and night programs that can be tailored to the needs of the students. If someone cannot get a job, then he or she should go back to school if they receive unemployment insurance benefits.

On a personal note, I did not finish high school. In my early 30s I participated in a program that enabled me to take correspondence and night school courses so I could obtain an accounting designation. It was difficult to hold down a full-time job, support a young family and keep up with my schoolwork. My children remember sitting on my knee in my home office as I read textbooks to them. They also watched me tear up sheets of accounting paper in my futile attempts to complete my homework. I know firsthand how difficult it is to move from an unskilled worker to a business professional. Without my designation, without my night school courses, and without some teachers who worked very hard to fill my stupid brain with knowledge, I would not have achieved many of my life goals. I have to admit that those years were difficult on my family and me, but in the end our lives were greatly improved.

To those readers who are between positions, now is the time to apply to your local college. The registrars will assist you in selecting a career suited to your capabilities and will likely help you find funding. Many of the jobs that the unemployed performed have been eliminated. The acquisition of new skills will improve your employment opportunities. Retraining could result in a new career that could provide a lifetime of financial stability for you and your family.

To those readers who are small businessmen and women, I ask you to give hiring preference to those applicants who have upgraded their skills or who are enrolled in community college, university, or night school programs. From personal experience, I know that these people will work hard and will grow with your business as they continue their education. In my small business, we reimbursed our staff for business oriented postsecondary education. I have to admit there was a downside. After providing some employees with a degree, they left the company. I do not regret paying for their education. They went on to be very successful in other organizations. They worked hard, raised their families, and more importantly, they contributed to society.

For America to succeed, we must have a highly educated and motivated workforce. Our economy will not grow through minimum-wage jobs. It will not grow through government subsidies. It will grow one job at a time as people learn new skills and apply them to their professional career. There will always be some people in business who underperform. I believe that it is good for the economy to encourage those workers to improve their skills or to replace them with workers who are better skilled and more motivated to perform. Some underperformers need a kick in the pants to get them back on the right track. I've noticed that when underperformers are terminated overall productivity improves. When new hires learn the tricks of the trade from the old-timers, everyone benefits. What surprised me was the number of things I learned from "kids" who were entering the workforce. They actually did teach this old dog a few new tricks.

While our government cannot create jobs, they can create an environment for business expansion. Lower taxes, less regulation, the elimination of bureaucratic red tape are just a few things that they can do. Corporations that still manufacture goods here in the USA need to advertise their products as made in the USA, in American factories, by American workers. Consumers need to look first at where product is made rather than the price when buying goods and services. American corporations that manufacture overseas need to review their foreign operations. In the current economy, with state and local incentives, it may be cheaper to manufacture goods in America, rather than making them overseas and shipping them to the American market.

America used to be the manufacturing powerhouse of the world. As consumers, we looked for and found cheaper products overseas. It started with small portable radios made in Japan. They could make them cheaper and better than we could. In the end, the electronics industry moved overseas because we chose not to compete. Imported cars offer more amenities, were better made, and were very good value. Rather than improving the quality of our automobiles, we shuddered factories and move the jobs overseas. Again we could not compete. The American auto companies learned their lessons, reengineered their vehicles to be as good or better than their foreign competitors. My current American built car runs better with less maintenance than other vehicles I owned in the past. If we want to ensure jobs for our children and grandchildren we must buy American-made goods. We cannot rebuild America when our dollars are shipped to China. Those dollars are needed here to restore our cities and educate our children.

As I write this article, the press announced that our confidence in the economy is at its lowest point in a decade. When I look around me, I see many opportunities. The stock market has bottomed, housing prices are at or near the lows and people are saving rather than spending. We are poised for a sustainable recovery that I believe will start soon after Labor Day. So shake off the gloom and doom, put a smile on your face and whistle a happy tune. America's best days are ahead, not behind us. Let the bad times go and bring on the recovery. When you awake tomorrow, realize that this is the beginning of the best days of our lives.

© 2011 Gordon Smith All Rights Reserved

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