Tuesday, October 18, 2011

I can has jobz?

For all of the talk that comes out of Washington on both sides, the reality remains the same. There are too few jobs for the people who want work, at least too few full-time, permanent jobs. Worse, there is no plan to fix it and I suspect there is not really a plan being proposed that will work. This is especially true among men without college degrees. Why do young men without a college degree have such a hard time finding career type work (as opposed to transitory jobs, i.e. working in a factory rather than working in fast food)? Is the problem a lack of government spending? Or is it a wage environment that makes hiring these men to do what amounts to unskilled work too expensive? Is the underlying problem that we have priced unskilled labor, the kind of work young men right out of high school used to transition into that has now disappeared, out of competitiveness? American consumers, the vast majority of whom are precisely the sort of middle- and lower-class Americans who have a hard time finding a job, demand cheap and plentiful consumer goods. To produce those goods in the quantities and at the prices demanded by consumers usually means that the products must be produced overseas. We have created a vicious circle where the very consumers who demand constant, cheap consumption cannot find work that provides a sufficient wage to satisfy their demand.

Americans are victims of our own affluence. Our demand for cheap goods and services coupled with our expectation of a certain wage level has driven many unskilled jobs that formerly were in America to locations overseas. It is easy to rail against evil and greedy corporations for doing this but what drives them to move jobs overseas is the demand for cheap consumer goods. Making consumer goods in America requires paying more and it just is not the case that American consumers by and large have shown a willingness to pay a premium for “Made In America”. Sure we talk a big game about it but look at a Wal-Mart parking lot and you will see that talk is cheap until you have to swipe your debit card. The combination of minimum wage levels that artificially inflate the wages of the least qualified workers, unionization which has dramatically escalated the cost of hiring blue collar workers and the flooding of women into the workforce that dilutes the demand for labor has led to a situation.

The result is found in the inevitable situation we are in. As the world shrinks and it becomes easier to mass produce in low labor cost countries and transport those goods to the more affluent market, it was inevitable that we would arrive at this situation.

Thus we have the foolishness and hubris of the “Occupy Wall Street” folks. What is happening here, and in pitiful assemblies in cities around America, is not a representative demonstration of the “99%” but rather a very small, very radical fringe on the Left. They have succeeded thus far in framing the “protests” as an uprising of 99% of Americans against the evil and greedy successful people when in reality they not only do not represent “99%” of Americans, they don’t represent even a majority of Americans but rather a very small, radical fringe. The Wall Street Journal reported on an informal survey of the protestors and the findings are about what I expected.
The protesters have a distinct ideology and are bound by a deep commitment to radical left-wing policies. On Oct. 10 and 11, Arielle Alter Confino, a senior researcher at my polling firm, interviewed nearly 200 protesters in New York's Zuccotti Park. Our findings probably represent the first systematic random sample of Occupy Wall Street opinion.

Our research shows clearly that the movement doesn't represent unemployed America and is not ideologically diverse. Rather, it comprises an unrepresentative segment of the electorate that believes in radical redistribution of wealth, civil disobedience and, in some instances, violence. Half (52%) have participated in a political movement before, virtually all (98%) say they would support civil disobedience to achieve their goals, and nearly one-third (31%) would support violence to advance their agenda.
Perhaps most disturbing was the stat that almost 1/3 of those informally polled were OK with the use of violence to achieve their “goals”. The gentlemen I have seen look perfectly capable of hooligan violence, i.e. tossing a garbage can through a store widow, but just as likely to wet themselves in the face of actually violence. The rumblings of this have been building for some time in the far Left violence at the meeting of various world economic conferences (like the G-8) and in some places in Europe as a reaction to the austerity measures being forced upon the most indebted nations. We are standing on the precipice of a very dangerous cliff but the various left wing causes being championed by the Occupy Wall Street crowd are likely to exacerbate the problems rather than alleviate them.

There are really only two ways to approach this economy with its utter lack of job creation. One is for the Federal government to tax and borrow enormous sums of money that will be used to “create” or more likely retain jobs, most of which will be in the public sector. The canard that Federal spending will go toward “shovel ready” jobs in the private sector has been shown to be false. The stimulus spending we already tried went largely to unionized public sector workers, in essence a tax payer funded payback to the public sector unions that overwhelmingly support Democrats who in turn seek to increase the number of public sector union worker who pay union dues….you get the picture. The other is for the country to swallow hard, prepare for some lean years and do everything possible to make the environment for hiring, investing and expanding as attractive as possible. There are no quick fixes here. Writing yet another check being cashed against the tax dollars of future generations is not a solution. We need genuine leadership and it is pretty clear we are not going to get that from the current inhabitant of the White House.
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