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There is enough work to support full employment
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by YankeeJim | November 8, 2011 at 08:17 am
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Radical imagination needed
If wages and prices were adjusted by an invisible hand, there is sufficient work and wealth to support a nation fully employed.
1. Equal pay for equal work – in a globally competitive society, labor rates are pegged to the global average. That means there are many people working in America who are overpaid.
2. Wealth concentration – in the USA today, too much wealth is concentrated in the hands of too few. That means taxing the wealthy and redistributing to where more people earn it.
In both instances, it means action is needed by “smart” government and the system needs adjusting and improving to accommodate better rules.
Professor Peter Morici describes the situation in this post. Mitt Romney says that he is aiming at a 4% growth scenario that Morici says is necessary to reduce unemployment to an area of acceptability.
My belief is that more radical and imaginative thinking is needed to reinvent the economic model and system for America such that optimizing return on national resources, beginning on a state by state basis can readily produce sufficient work and opportunity without wasting generations to wait for a slow, iterative, and uncertain plodding along the old ways.
“Root causes impede job growth
By Peter Morici
Monday, November 7, 2011 - Updated 1 day agoThe economy added only 80,000 jobs in October, disappointing forecasters who expected 95,000. The economy appears to be stuck in low gear to make a real dent in the nearly 14 million unemployed.
Unemployment was down to 9.0 percent from 9.1 percent the previous month. A change that was not significant given that many adults remain on the sidelines and too discouraged to look for work.
Wholesale and retail trade, health care and social services, manufacturing, and leisure and hospitality added jobs, whereas telecommunications, banking and securities posted losses. Info-tech gained and financial services lost positions in September, but both sectors posted losses for the entire third quarter reflecting broader layoffs in those sectors with more ahead.
Government employment fell by 24,000 and private sector jobs added 104,000
Such weak jobs growth is inadequate to appreciably dent unemployment — at least 130,000 jobs are needed each month to keep up with growth in the adult population. Many adults are sitting on the sidelines and not looking for work, and are not counted among the unemployed.
Factoring in those discouraged adults and others working part time for lack of full-time opportunities, the unemployment rate is about 16.2 percent.
The economy must add 13.3 million jobs over the next three years—368,000 each month—to bring unemployment down to 6 percent. Considering continuing layoffs at state and local governments and federal spending cuts, private sector jobs must increase about 400,000 a month to accomplish that goal.
Growth in the range of 4 to 5 percent is needed to get unemployment down to 6 percent over the next several years. In 2011, the economy has been growing at about 2 percent, and that pace is expected to continue through next year.
Growth is weak and jobs are in jeopardy, because temporary tax cuts, stimulus spending, large federal deficits, expensive and ineffective business regulations, and increased health care mandates and costs do not address structural problems holding back dynamic growth and jobs creation—the huge trade deficit and dysfunctional energy policies.
Peter Morici is a professor at the Smith School of Business at the University of Maryland.”
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Most RecentMost Recommended Comments (1)
at 14:00 on November 8th, 2011
Ignore the story and fail to address solutions is how Americans treat the subject.