Monday, September 5, 2011

Labor Day Treatise: finding a road to economic recovery and solutions to high unemployment?

Keywords or Terms: Labor Day; Economic Recovery; Unemployment; Congress; Whitehouse; China; Macroeconomics Public Policy; President Obama; Capital Project; and Political Party Leader

How can America get out of this nasty recession? Would giving many speeches over the pains and difficulty of job loss be an ideal model for resolving this recession? In fact, is there a single silver bullet to solve the unemployment and housing foreclosures problems that have characterized this current recession? Despite the severity of the unemployment problem and home foreclosures, and their implication for quality of American life, it does not seem as though our Republican friends in congress are paying much attention to the negative impact of the current recession. In simple terms, the middle income groups – those who bust their butt to ensure that the engine of America’s progress doesn’t come to a halt – are probably obfuscated for good by the current nemesis of unemployment and dastardly effect of the recession. On Labor Day, the blog contemplates finding a road to economic recovery and solutions to high unemployment.

Democrats and Republicans in Congress must wake up to reality. They cannot continue to play politics with people’s lives and expect high job rating or positive fervor from the millions of Americans seeking employment. Statistics from United States Department of Labor show that in the preceding month, August 2011, not one single job was created in the economy. A 2009 statement from the former Chairman of Presidential National Economic Advisers, Dr. Summers, projected that high unemployment was going to be with us for a very long time. However, this does not have to be. This is America, a nation that once financed a Marshall Plan for Europe and lifted Japan from the depths and despair of the Second World War. A nation that once created jobs nearly every day during the late sixties, gave life to Taiwan manufacturing despite the oppressions of Communist Party Leaders in China. A nation where ‘made in china’ meant so little in the sixties and early seventies before Nixon went to China and projected the possibility for exploiting China’s cheap labor force.

Is this the same country that encouraged manufacturing in a country where the average high school graduate is better known for wrote memory rather than independent thoughts, genuine creativity or invention; which some absent-minded Americans are now touting as threatening America’s dominance of productivity in the world? Well, for those who have short-memory or may have forgotten: American Companies shipped America’s manufacturing industries to China and several other third world countries, because of government public policies that can be reverted! I have seen it done before and I know, if America and our congress are ready to deal with the unemployment problem and other associated problems of this recession, they can solve the current 15% unemployment problem. You cannot ship your manufacturing base to other countries and expect national unemployment to trend down rapidly. Manufacturing industries within our borders means jobs for our teaming millions. In short, a manufacturing base is a guarantee of jobs in any economy.

Our political leaders must not mind naysayers, they will always be with us, and we only need to prove them wrong or put them in their proper place, to get this country moving again. We can explore several alternative job creating public policies, because current policies and past initiatives of government under both Republicans and Democrats, encouraged firms to move capital and business overseas. The purpose of leadership is to bring about change where and when necessary, especially now with so many Americans out of work. The hard fact of the current unemployment is many Americans, professionals and non-professionals, college educated, old and young , workers are now out of work, just like high school diploma holders known in the past for the drudgery work. The task for our political leaders is to create a clear and aligned vision and strategies which will not only create jobs in the economy, but also hold them for longer than in the past. Congress must work with President Obama to translate his vision for immediate job creation to reality, once he gives his speech on Thursday.

It is okay to create jobs from government spending, because that is probably what we have left as many private sector gurus are holding tight to their money and not reinvesting in America to create jobs. We cannot allow the current disinvest behavior of many corporations and their executives to cascade into further disaster for the economy. It is also okay to spend on developing, upgrading and retooling skills of laid-off workers, so they can be ready for a newer and probably greener economy; without which, we may be looking at an unprepared labor force, unable to take on the challenge of the twenty-first century industry; and or, a 25% unemployment rate down the road. Our ability and capability as a labor force can only be enhanced at this time, if government investment in skills development and enhancements are not frugal. Yes, I have heard the political pessimists say we cannot afford this kind of government spending, but ask them what the alternative is, and they all come up with rambling and dabbling statements that exhibit their ignorance of macro-economics principle. Tough unemployment problem requires tough and determinant macro-economics public policy solutions, some of which may be unpalatable for a while.

Congressional leaders must understand that the ability to relate to the problems of the country is one crucial quality of leadership. Each congressional lawmaker, Republican or Democrats, come out of cities, counties and states that are looking at between six to twenty percent unemployment rates. Data of people out of work or who have dropped out of the labor force may not be complete; however, each lawmaker has a dossier of how bad things are in their constituency; and, many of them can truly tell you: “things are tough in the America’s wasteland.” The onus now is to set aside party politics and yield to the demands of millions of Americans for work. We cannot continue to have a nation of 'haves' and a disproportionately high number of 'have not’s. Seasoned politicians will tell you what we now have is a recipe for political unrest, just as we have seen in some countries of Europe, Middle East and Asia.

So much grandstanding going on among political party leaders in congress is not good; as most have failed to understand the human impact of prolonged recession; especially high unemployment in inner cities and among minority groups. Each party leader is currently protecting their political or ideological toughs and each to some degree, is looking away from the realities of unemployment among some sectors and areas of the nation. As any community action leader and planner know, without assertive and altruistic initiatives to resolve a very thorny problem in communities, it may just be difficult to bring about some order or change to a problem impacting a largely disproportionate number of people in the community. President Obama, a seasoned community organizer and politician, is probably seeking a team-based approach to resolving the high unemployment rate among Americans. It is now the responsibility of political leaders from both aisle of congress to give him the chance or benefit of doubt by avoiding party politics and grand standing, on this very nasty problem of unemployment.

There is hope that if both party leaders in congress engage with the President, it is possible to create jobs that can have huge impact on the unemployment rate. However, to arrive at this solution or destination, there is a need to engage the heads and hearts of every politician in congress, governors’ houses, policymakers at the federal level and in various state capitols, counties and cities. Everyone must now reject party politics or myopic political self-interest as the unemployment problem is an American problem, not a political party problem as many self-serving politicians want America to believe. This means, all hands must be on deck to bring about change to this skyrocketing unemployment rate, once plausible solutions are advanced by the President come Thursday.

The following is my contribution to the solution to the unemployment problem; a few of my suggestions I have blogged in the past and may resonate with some of my readers and politicians, who are truly interested in helping America take care of her number one problem, job creation:

1)      Investment in capital projects. No matter where you look, our roads, airports, dams, piers, bridges, classrooms and electrical power grids are crumbling. The dilapidated infrastructure can be replaced, with government investments in these endeavors, creating jobs in the construction, manufacturing and building industries.

2)      Elevating public laws to meet changing times. There are some outdated government regulations and laws that are encouraging disinvestment in America or shifting of jobs overseas. It is time to consider the day-to-day impact of stifling government regulations and laws that are making America’s entrepreneurs to shift businesses and money overseas. However, this effort must not be designed to undo or undermine necessary regulatory safeguards that are essential to running a safe workplace.

3)      Prioritizing Government Investment Projects. Proposed initiatives or public policy must focus on infrastructure projects that will create a large number of jobs, immediately. Policymakers in the Obama’s Administration cannot afford to see many Americans out of work by the first quarter of 2012; or else, President Obama’s second term is signora!

4)      Challenge the Status Quo. Take a firm stand on jobs creation, not only in the current recession, but also in the future ones. How about mandating constitutional amendment to guarantee that all people willing and seeking to work, finds employment? Well, that will be going too far, except one is a member of the Tea Party faction in the Republican Party? All jokes apart, it is known that faster job creation increases National Income and output; and, among other things, raises the ratio of employees paying into social security retirement fund, thereby lowering the average contribution of each worker to Medicare and Medicaid costs and similar social safety net. Now, those are genuine reasons to create jobs!

5)      Elevate Proactive Thinking in Labor Policy Formation. Consider other more responsive public policy than giving money to employers to hire and retain employees on their payroll. European countries would tell you from experience that such initiative or government programs hardly make much of a difference as many of such companies end up laying off those same workers, immediately the subsidy is over. Labor Policy contemplated must be clear, contextual and long term to be able to make an impact on the unemployment rate.

Frankly, there are no legitimate arguments to having unemployment as high as 9% in America. Government policies and political party leaders’ muscle flexing, or other minor inconsequential, can have huge impact on the number of workers in America. Yes, our economy suffers some cyclical inadequacies that make unemployment to rise or fall with the expansion and contraction of the economic indicators. However, once our political party leaders understand that the problem of unemployment is not the domain of one political party; the earlier we are able to resolve this problem. Further, the earlier politicians appreciate that finding solution(s) to the problem of unemployment cannot be completely left to a party leader in the Whitehouse; or, to leaders of political party in majority in congress; and that the problem impacts the lives of people, some of them family members, neighbors, friends, and acquittance, the better we are able to get ourselves out of this maze. Finally, unless our politicians appreciate that many of the 15 million unemployed are voters; and that if quick and drastic solutions is not found to the current unemployment problem, many of them will be thrown out of congress and White House, maybe we will start to see the silver lining at the end of this tunnel!
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