Tag Archives: jobs

Businesses Hire When Customers Are Coming In The Door

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Another bad jobless claims report… and this time Washington seems to have finally noticed that there are some unemployed people out here in the sticks. But instead of jobs programs the geniuses are proposing … what else? … even more tax cuts. (And after a few hours they’ll go back to complaining about deficits but blame “spending.”) And of course, they are once again trying to “appeal to Republican lawmakers” without getting it that Republican lawmakers are doing everything they can to slow job growth so they can win the next election.
Bloomberg: Payroll-Tax Break Said to Be Discussed by Obama Aides Amid Slowing Economy,

President Barack Obama’s advisers have discussed seeking a temporary cut in the payroll taxes businesses pay on wages as they debate ways to spur hiring amid signs that the recovery is slowing, according to people familiar with the matter.
. . . The talks reflect the political constraints the White House is operating under with the Republican majority in the U.S. House pushing to cut federal spending. A hiring stimulus based on a tax break for employers may appeal to Republican lawmakers, many of whom have called for measures to help businesses.

Companies Only Hire When Customers Are Coming In The Door
Here is something the geniuses haven’t noticed, in all their geniosity: It doesn’t matter how much more money you give to business owners, businesses are not going to hire any more employees until they have a REASON to – and that reason is customers coming in the door.
OK, That was bold and italicized. Maybe if I make it ALL CAPS the geniuses will see it? Let’s see: BUSINESSES ARE NOT GOING TO HIRE ANY MORE EMPLOYEES UNTIL THEY HAVE A REASON TO AND THAT REASON IS CUSTOMERS COMING IN THE DOOR.
Businesses are not going to hire people just to sit around and listen to iPods or read the paper, waiting for a customer.
Terrance Heath, in America’s Unhappy Anniversary: Ten Years Of The Bush Tax Cuts For The Wealthy,

Republicans claim that preserving the Bush tax cuts for the wealthy is in the interest of small businesses, but small business owners are starting to demand a repeal of the Bush tax cuts.

“We are fed by our consumers, not by our tax breaks,” says Rick Poore, owner of Designwear, Inc., a screen-printing business based in Lincoln, Neb. “If you drive more people to my business, I will hire more people. It’s as simple as that. If you give me a tax break, I’ll just take the wife to the Bahamas.“

Businesses are fed by their customers, not by tax cuts. Tax cuts only feed deficits. Customers coming in the door is what causes businesses to hire. In case you missed that: Customers coming in the door is what causes businesses to hire.
Direct Job Creation Is Needed
Until there are more customers businesses are not going to hire. Why should they? So it is up to us (government: We, the People…) to create some customers. The way to do that is to hire people to do some of the things that it is government’s job to do anyway, but government has been putting off because of so many tax cuts.
Fix the infrastructure: Our infrastructure is crumbling. In Obama Should Call Chamber’s Infrastructure Bluff I linked to an Urban Land Institute report on the country’s infrastructure, showing how we are falling behind countries like Brazil, China and India, and to the American Society of Civil Engineers (ASCE) Infrastructure Report Card, that says a $2.2 trillion investment is needed just to bring the country’s infrastructure back up to current standards.
This infrastructure work has to be done no matter what. The longer we delay it the more our country falls behind. It is millions of jobs that need doing at a time when millions need jobs! (And by the way the government can borrow at nearly zero interest rates right now — one more reason to do it now.)
Green jobs: And then there are the green jobs you should be creating. You should be hiring people to retrofit every home and building in the country to be more energy efficient. This pays for itself because we stop sending so much money to the oil-producing countries, stop putting so much carbon in the air, and our economy becomes more efficient. And put more money into alternative energy, too. I mean, jeeze, geniuses, what part of this is hard to get?
Jobs fix deficits: Hiring people to fix up the infrastructure takes them off the unemployment rolls and off the other assistance programs, lowering government spending on those programs. Having those jobs means they are paying taxes again, raising government revenue. And fixing up the infrastructure makes our businesses more competitive again, growing the economy. It’s a no-brainer which should mean even the DC geniuses can figure it out.
Fix Trade
Because of bad trade deals, much of any revival of our economy just means that we send more money out of the country. The trade deficits, especially with China, are also economy deficits. We are not just sending jobs and money out of the country, we are sending our chances of coming out of this economic slump out of the country as well.
And these trade deals pit exploited, underpaid workers in non- or weak democracies against our workers who had been benefiting from the good wages, workers protections and other non-“business friendly” things that democracy brings along with it.
Our trade deals have made our democracy and the resulting high standard of living into a disadvantage. Who were the geniuses that let that happen?
Restore Long-Term Incentives
Tax cuts have cut the incentive for long-term business models. It used to take time to build a fortune, so businesses had to place themselves within healthy communities with good schools, well-maintained infrastructure and solid, well-funded public structures like the court system. Cutting top tax rates changed business models to make more sense “harvesting” those things in a hurry and moving on to the next community with resources to plunder. Low top tax rates encourage quick-buck schemes.
Propose The Right Thing
Propose the right thing and do it publicly, instead of trying to appease a political ideology bent on destroying government. Doing the right thing is also the right thing politically. If the job situation doesn’t get better you’re going to be thrown out of office. So come one, geniuses, get smart and start hiring people to fix up the infrastructure and make the economy more energy efficient.
10 years of Bush tax cuts is enough! Click here to demand your representative supports the Fairness in Taxation Act so the rich contribute their fair share.
This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am also a Fellow with CAF.

The Storm That Created The “Rust Belt” Is Heading For Silicon Valley

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This fall I was invited to cover the the Keep It Made In America Tour put on by the Alliance for American Manufacturing. I spent a week driving around Michigan, Ohio, Pennsylvania and West Virginia, ejoying the fall colors and visiting small towns all along the way.
I live in Silicon Valley where in spite of the high unemployment — still 10.6% — it’s still pretty nice here, so the extent and especially breadth of the decline of so many cities and towns was a shock. Everywhere you go you see America’s infrastructure crumbling! Of course I know this has been going on, but when you actually come from somewhere that is still pretty nice and see it firsthand – and everywhere – you really see it.
As I drove around these states I saw pretty much the same thing in town after town. As you approach the town on the highway the first thing you encounter is what I will call the vulture circle that surrounds it. This is the circle of Wall Street-owned chains emulating the Wal-Mart model of sucking cash out of the area and sending it away to the wealthy elites who own … almost everything now. These are the national chains that are all the same in every town, all selling the same stuff, all made in China, all putting the local small businesses out of business.
As you drive into town the next thing you encounter is the circle of home equity extraction, with newer houses that have taken on big first and second Wall Street mortgages. These houses mostly look OK — except the foreclosures with the brown lawns and grass growing in the cracks in the driveway. This area has car dealers and strip malls that used to sell expensive cars or nice goods. These dealers and stores feasted on those “take money out of your house” refinancings or second mortgages. Now they have nail and hair salons or are just “for lease.”
As you get closer to the center of town you come to the areas of older houses, more of them boarded up than you want to see, with old, boarded-up stores on a few of the corners of the larger streets. Where there are still-occupied houses they have bars on the windows.
Finally you come to the old, crumbling downtown where there are many empty storefronts, some boarded, the lost dreams of the local small business-owners. Here and there you see, between the vacant lots, a few government buildings.
And then somewhere is what they always call “the old plant.” This is one or more closed-up, fenced-off, rusting old factories or mills. They are fenced off, with lots of broken windows, and maybe part of a building is falling down. This is where the people used to work but the jobs moved to Mexico or China.
Much of the country is like this now. So many of the older small towns, crumbling, the money sucked out by the Wall Street elite. The factories sold off, closed. The people can’t make a living, the towns can’t make a living, the country can’t make a living, the Wall Street elite making a killing.
You can see the process starting here in Silicon Valley, too. As you drive around this area you see that one of every four or five office or light-industrial buildings has an “Available” sign. The region has the same number of manufacturing jobs as it had when the “tech revolution” began. The rest have moved to China. We don’t make cell phones here. We don’t make flat-screen TVs here. We don’t make computers here. We certainly don’t make iPads here — even though Jobs is his name!
Even exclusive Palo Alto has empty storefronts on the main drag. (You know the economy is bad when the rug stores on University Avenue are actually going out of business!) It is even happening here. It will get worse.
In July Intel’s retired CEO and Chairman Andy Grove wrote an important opinion piece,
How to Make an American Job Before It’s Too Late, in which he warned,

Clearly, the great Silicon Valley innovation machine hasn’t been creating many jobs of late — unless you are counting Asia, where American technology companies have been adding jobs like mad for years.
[. . .] As time passed, wages and health-care costs rose in the U.S., and China opened up. American companies discovered they could have their manufacturing and even their engineering done cheaper overseas. When they did so, margins improved. Management was happy, and so were stockholders. Growth continued, even more profitably. But the job machine began sputtering.

Please take the time to read Grove’s entire piece.
The storm that created the rust belt is heading our way, and we need to pay attention. What will it take for American companies to create American jobs rather than jobs outside America?

Labor Day: Labor Got It Right — Who Could Have Known?

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“Who could have known?” That’s the cry from the big-corporate and DC elite as the economy and the environment and so many imporant things crash around us. (Around us, not them, they’re doing just fine and taking good care of each other.)
Who could have known that 25%-per-year house price increases was a bubble?
Who could have known that a housing bubble could burst?
Who could have known that deregulating the financial industry could lead to a financial meltdown?
Who could have known that concentration of wealth could cause consumer demand to dry up?
Who could have known that huge tax cuts for the rich combined with huge military spending increases could cause massive budget deficits?
Who could have known that the Social Security trust fund needed a “lockbox” so it wouldn’t be given away as tax cuts?
Who could have known a deregulated deep-water well could cause a massive, destructive, uncontrolled underwater gusher?
Who could have known that continuing to put carbon into the air would cause problems for the climate?
Who could have known that moving our factories out of the country would lead to high unemployment and structural trade deficits?
Who could have known that invading Iraq was wrong and a deadly, disastrous, costly, long-term mistake?
Who could have known that a too-small stimulus that focused on tax cuts wouldn’t turn the economy completely around and then conservatives would claim that the stimulus “killed the recovery?”
(List continues into infinity…)
Add organized labor to the list of those who got it right, time after time.
Organized labor was right about the 40-hour workweek.
They were right about the middle class.
They were right about the weekend.
They were right about paid vacations.
They were right about paid holidays.
They were right about paid sick leave.
They were right about providing good, secure retirement plans for everyone.
They were right about providing unemployment benefits to tide people over.
They were right about providing maternity leave, child care and family leave for families.
They were right that trade agreements like NAFTA and letting China into the WTO would lead to massive trade deficits and job losses.
They were right about workplace and consumer safety.
They were right about keeping manufacturing in America.
They were right about fighting discrimination in the workplace.
They were right about raising the minimum wage and the effect that low-wage policies would have on the economy.
They were right about the effect of excessive CEO pay on the economy.
They were right about the devastating effect of the Bush tax cuts.
They were right about the need to maintain and modernize our country’s infrastructure.
They were right about going green.
They were right ab out the dangers of Wall Street’s financialization of the economy.
They were right about providing good health care to everyone.
They were right about strengthening, not cutting Social Security.
They were right about democratizing corporate governance.
They were right about fighting privatization.
They were right about fighting deregulation.
They were right about providing good education opportunities to everyone.
They were and are right that we need a national jobs agenda
Labor was right about people joining together instead of being on our own.
(List continues into infinity…) They were right and they continue to be right.
And unions have been fighting for these things for all of us, not just for their members.
Please add to these lists in the comments! What other things could nobody have known, and what other things did labor get right?
Enjoy Labor Day. In fact, for those of you that still have jobs after the decades of conservative policies, enjoy having weekends off, the 40-hour week, paid vacations, sick pay, health care, etc. And if you have a job but don’t have those things … JOIN A UNION!
P.S. Here’s an example of being right:

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.