WHY DOES THE JOB MARKET FEEL SO CRUMMY?

The job market feels so crummy because it is. The majority of gains in employee compensation for a long, long time have gone towards the spiralling cost of healthcare, not wages. Public sector workers also have done better than private sector workers, which doesn't make those who pay taxes feel very good.

Since Congressional outrage over Enron led to Sarbanes-Oxley, government has been on a concerted drive to restrain entrepreneurship, punish corporations, and ship jobs overseas. They don't see it this way. In fact, they lie to us (and perhaps to themselves) and say that their policies are intended to create jobs. The evidence is against them, no matter how effective they are at propaganda.

The fact that most manufacturing (and hiring) is being done overseas is the direct effect of chasing manufacturing from our shores for over thirty years. This was done through short-sighted tax policy and overly litigious environmental restrictions that argues against investing on our own shores. What we need is to encourage investment in our own infrastructure - but how? There should be reasonable environmental restrictions and there should be a reasonable tax system....but we aren't even on a trajectory to revisit and revise. These issues simply draw a yawn from the average voter.

The annual charade in Washington held last week expressively to pillory the energy executives for fuel costs is telling in this regard. The American people, who cheered lustily, are steadfast in their disregard of recorded fact. The fact is that the Obama administration is seeking to hamstring our domestic energy providers at every turn in the road if it doesn't lead directly to wind or solar and the fact is that their policy is unrealistic and damaging to the entire economy as well as individual households - yet Obama and the liberals are unscathed.

The unemployment problem is also harder to correct because of the change to a global economy. The number of producing jobs (farming, manufacturing and construction) has decreased significantly because of automation, outsourcing manufactured goods and reduction in residential and commercial construction as a result unintended consequences from government forcing financially unsound affordable housing.

The number of non producing service and government jobs cannot counter the effect of lost producer jobs. Retail trade, business services, education (except teachers), health, leisure and government cannot create a demand. We can wash each others clothes until they wear out but it cannot improve the economy. A countries ability to provide its services is dependent on its profits from producing something.

On the brighter side of the employment spectrum, the U.S. is still a producer, just not a producer of as many industrial products as in the past. It produces software, financial services, designs, technology, raw materials, food, textiles, agricultural products and byproducts, medical services, pharmaceuticals, and on and on.

There are a number of extremely successful products that are designed in the U.S. and fabricated or assembled abroad. The Apple iPhone, for example, Intel microprocessors, RAM, Procter-Silex appliances, etc.

Our economy is many times larger and richer than it was during our heyday of industrial might in the 1950s. The one thing we have a lot less of today is traditional, blue collar factory jobs. Those jobs are never coming back, because for one thing technology has changed the way we make things, and for another, it's no longer possible to run a factory profitably thanks to unions, EPA regs, and plenty of foreign competition.

Posted in: US