Tag Archives: Employment

Commentary

Thomas Sowell urges us to reflect on economic trade-offs and incentives

2 Comments
Thomas Sowell

Article here on Creators.

Excerpt:

With all the laments in the media about skyrocketing unemployment among young people, and especially minority young people, few media pundits even try to connect the dots to explain why unemployment hits some groups much harder than others.

Yet unusually high unemployment rates among young people is not something new or even something peculiar to the United States. Even before the current worldwide recession, unemployment rates were 20 percent or more among workers under 25 years of age in a number of Western European countries.

The young have less experience to offer and are therefore less in demand. Before politicians stepped in, that just meant that younger workers were paid less. But this is not a permanent situation because youth itself is not permanent, and pay rises with experience.

Enter politicians. By mandating a minimum wage that sounds reasonable for most workers, they put a price on inexperienced and unskilled labor that often exceeds what it is worth.

Mandated pay rates, like mandated insurance coverage, impose on buyers and sellers alike things that they would not choose to do otherwise.

Workers of course prefer higher wage rates. But the very fact that the government has to impose those wage rates means that workers were unwilling to risk not having a job by refusing to work for less than the wage rate that has been mandated. Now that choice has been taken out of their hands, with the hidden cost in this case being higher unemployment rates.

The law of unintended consequences – hurting the very people they intended to help, because of their economic ignorance. They priced the youngest and most vulnerable workers out of a job, by mandating a minimum wage that no employer will pay to an inexperienced worker. During a recession, you LOWER minimum wage in order to make sure that those most in need can find a job rather than depend on the government.

When people have jobs, they have confidence to spend more money. Making sure that no policy harms job creation is a primary responsibility of government. Jobs, jobs, jobs. No one (especially Christians) should be dependent on the government for money – because the one who pays the piper calls the tune. And no Christian should dance to the tune of a secular leftist government.

If you are a Christian, but not yet a solid small-government fiscal conservative, then read the WHOLE thing. Christians need to understand that the free market is the best guarantor of our freedom of conscience.

Thomas Sowell is my favorite living economist. Walter Williams is number 2. If you click this link, you can read something from Walter Williams about the economic problems that are created by forcing insurance companies to cover people with pre-existing conditions.

Related posts

Commentary

How Democrat policies cause unemployment to increase

Leave a comment

Consider this article from the Washington Post. (H/T Belmont Club via ECM)

How Democrats prevent job creation

Most of the article talks about how Obama’s temporary hand-outs will not create any lasting jobs – they’ll simply go away as soon as the government stops taking money from the private sector to pay for these public works projects. But then the article talks about free trade and how free trade creates jobs. Is Obama in favor of free trade?

Excerpt:

More promising is the president’s call for a renewed national emphasis on exports, which currently support about 10 million jobs in the United States. It’s a sound concept, especially at a time when the weak dollar improves this country’s global competitiveness. But the goal he set in his State of the Union address — doubling exports to $3 trillion per year over the next half-decade — is unreachable via the laudable but modest policies that he has been willing to embrace so far, such as greater trade promotion efforts and relaxed controls on national security-related export controls. Though he called for “strengthened” trade relations with South Korea, Panama and Colombia, he did not challenge Congress to approve pending free-trade agreements with those three countries. That would require defying labor unions and other interest groups in his party. But it would create hundreds of thousands of jobs.

Free trade creates jobs by allowing our businesses to buy cheaper materials from abroad, and to sell their products into foreign markets. Consumers also benefit by being able to buy cheaper foreign goods, which allows them to save, invest or buy other things.

The only people who suffer are labor unions, who are paid salaries and benefits far in excess of what their skills really warrant. For example, a unionized GM auto worker in Detroit may be paid $70/hour in salary and benefits, while a non-unionized Honda auto worker in Ohio may be paid $40/hour. Unfortunately, these unions play a big role in getting Democrats elected, sometimes by using violence, etc., to get their man elected.

How Democrats cause jobs to be shipped overseas

Here is the latest from the Heritage Foundation. (dated 01/12/10)

Excerpt:

According to an Associated Press analysis reviewed by independent economists at five universities, the $20 billion spent nationwide on infrastructure so far “has had no effect on local unemployment rates.” And this was just the most recent embarrassing headline for the White House’s signature economic policy. Since the first reporting deadline in October, newspapers and other media outlets across the country have identified 94,341 fake jobs reported by the Obama administration as jobs “created or saved” by the stimulus. After the Government Accountability Office issued a report finding “significant reporting and processing problems that need to be addressed,” Obama administration spokesman Ed Pound offered this defense of the Obama administration’s jobs numbers: “Who knows, man, who really knows.”

Now Office of Management and Budget Director Peter Orszag issued a little-noticed memo last month ending the “saved or created” metric and instead directing agencies to count only jobs “funded” by stimulus dollars. But as Harvard University labor economist Lawrence Katz tells ProPublica, this is not really an improvement: “I just think it’s a silly exercise.” Instead Katz says a more accurate way to account for the effect of the stimulus is to look at the unemployment numbers put out by the Bureau of Labor Statistics.

That is a great idea. The latest BLS report issued last Friday found that the U.S. economy dropped 85,000 jobs in December, bringing the jobs lost total to 2.7 million since the stimulus was passed and 3.4 million since Obama became President. In contrast, the President’s White House Council of Economic Advisers had promised total employment of at least 138.6 million by 2010. Actual employment as of December was reported to be 130.9 million, leaving the Obama jobs deficit at 7.7 million.

The problem with infrastructure spending as stimulus, and really government spending as stimulus, is that Congress does not have a vault of money waiting to be distributed. Every dollar Congress injects into the economy must first be taxed or borrowed out of the economy. No new spending power is created. It is merely redistributed from one group of people to another. Businesses are telling pollsters that among the biggest reasons they are not creating jobs is the prospect of new tax and regulatory burdens. A better solution to reduce unemployment is to simplify and reduce the barriers to business success.

The problem is that Obama is associated with special interests who are hostile to business, like unions, trial lawyers, and environmentalists, so he won’t do what needs to be done. Whenever Democrats tax, regulate, intimidate, and demonize business, they cause unemployment to increase. Fancy that. All this complaining by Democrats about “greedy corporations” and “global warming” cost you your job.

Obama promised that his policies would create jobs, but his policies failed. He predicted that his policies would work, but they did not work. He prescribed pixie dust to fix the economy, and it failed. He failed. And his only response to his failure is to blame his predecessor who embraced tax cuts and free trade, and presided over a 5.2% average unemployment rate over 8 years. George W. Bush didn’t attack businesses, and we all had jobs. Remember that?

Related posts

Commentary

Are women underpaid for doing the same work as a man?

3 Comments

Here is a neat article from TotallyHer.com on this issue.

Excerpt:

Over the years there’s been much debate surrounding the concern for women receiving inequitable pay, relative to the same work men do. This continues to be an issue even in 2010! As a matter of fact, did you know that there’s an Equity Pay Day this year?

But it’s not just special interest groups who express the concern for women’s apparent lack of parity in their paychecks. President Obama signed legislation early in his presidency to ensure equal pay for women.

So is the President himself admitting that a woman can do the exact same work, for the exact same amount of time, with the exact same qualifications and experience as her male counterpart and get a smaller paycheck? Is that happening in the United States right now?

Click through to read the article and see what the research shows.

Thomas Sowell’s take on the pay gap

I actually have a book on my shelf by Thomas Sowell that tackles this very issue, among others, called “Economic Facts and Fallacies”. Here’s a short 3 minute video about the book.

There’s also a nice 4-clip discussion of the book between Dennis Prager and Thomas Sowell, (from Prager’s radio show). I’m listening to it now, and Sowell also preferred Fred Thompson in the 2008 Republican primary, just like me! This is a really, really good interview.

My thoughts

When I survey the best of my Christian male friends, we all agree that work really gets in the way of the things we would like to be doing. Some of us would like to be working more on our marriages and relationships, or playing with children, or writing, or teaching classes in the church, or organizing debate and lecture events, or lifting weights and playing sports… but one thing we agree on is that there is too much emphasis for men on the workplace as the theater of for our achievements. It’s just stupid.

I myself would love to work fewer hours if I could have more time for other things. Why work so hard just to pay more in taxes? I think men get trapped into marriage and children and then they are stuck working too hard to pay 40% in taxes for government bureacrats to marriage. High taxes are a real disincentive for men contemplating marriage. If women were smart, they would vote to shrink government, welfare and social programs. Then men would really be interested in marriage, because they could work less and still have time for other interesting things.