Scary Reasons Not to Get Giddy over the Unemployment Numbers

News reports on unemployment claims aren’t only misleading, they’re dangerously ill-omened. They fail to report what’s really going on.

 

- May 9, 2013 -

Curiously, the news media conveys optimistic stories, and Wall Street investors and others are jubilant over the federal government’s recent jobs reports. The Labor Department reported that initially 4,000 fewer Americans filed for unemployment benefits to 323,000. That was ostensibly a five-and-half-year low.

For example, Reuters reported today: “Jobless claims hint at strengthening labor market.” 

All day long, news-media companies supplied video reports to this Biz Coach portal’s Newsroom for the pages entitled Business and Stock Markets. But the philosophy here is not to censor reports – even if they are misleading by not telling the complete story.

No one appears motivated to dig deep enough. As a credentialed journalist, I’m also a business-performance consultant. I remain skeptical about the federal government’s policies because I experience firsthand the trials and tribulations of entrepreneurs and their Main Street customers.

Under-reported issues

The big-ticket sellers who need adequate numbers of credit-worthy customers in order to be profitable are finding it a big challenge. Actually, the negative trend was well underway at least a year before the National Bureau of Economic Research’s official declaration of the recession.

Red flags were everywhere — from auto dealers launching bad-credit sales departments – to the skyrocketing student-loan defaults and complaints about Sallie Mae’s questionable practices.

Seemingly, everyone involved in Main Street business was deeply challenged, and remains a reason why this portal has more than 140 public-policy articles and an economic-analysis Op Ed page that explain the issues.

But you don’t have to be a business consultant to understand the problems and solutions. For example, the accurate big picture about the economy and jobs was exposed in an article on RealClearPolitics. Citing government data, it was authored by Louis Woodhill – a successful engineer, software entrepreneur, and a Forbes contributor.

He points out the “BLS Establishment Survey, which reported that 165,000 payroll jobs had been created during April, the Household Survey* numbers told a much different story.”

Too-few family wage jobs

Mr. Woodhill wrote: “Total employment rose by 293,000 during April, but part-time jobs increased by 441,000. As a result, full-time jobs declined by 148,000.”

He further stated the number of full-time jobs only increased by 73,000. That, of course, means this “was not enough to keep pace with the growth of our working-age population, so the ‘FTE jobs ratio’ (the number of FTE jobs per 100 working-age Americans), fell according to Mr. Woodhill.

This gives us threatening information about the nation’s recovery.

“The April jobs numbers describe a mass replacement of full-time workers with part-time employees, coupled with a fall in the length of the average workweek,” he wrote. “This happens to be precisely what you would expect, given the perverse incentives baked into Obamacare, which took effect on January 1.”

More bad indicators

“During April, the FTE jobs ratio fell for the fifth month in a row, to 53.09,” he warned. “The earliest warning signal for every recession since 1955 (the first year for which the data is available) has been a significant, sustained decline in this ratio.”

He provided a history lesson:

“As of April, the fall in the FTE jobs ratio from its local peak was only 0.11,” he conceded. “This is not yet a strong indicator of an impending recession. Only one of the recessions since 1955 (that of 1970) was presaged by this mild a decline, and there were eight instances during the past 50 years where the FTE jobs ratio declined by this much over five months, and the economy did not fall into recession.”

Excerpts of his red flags:

“This having been said, there also has never been a case where the FTE jobs ratio fell for five months in a row and a recession did not follow. So the recent decline is definitely something to be concerned about.

“Based upon the historical record, if the current decline in the FTE jobs ratio were to continue, and to reach a cumulative 0.60, renewed recession would become a virtual certainty.

“In the case of the most recent recession, the decline in the FTE jobs ratio exceeded 0.60 five months before the recession officially started, and a full 15 months before the National Bureau of Economic Research (NBER) formally declared that a recession had begun in January 2008.”

Comparison of monetary policies

“It is now 76 months since our latest employment recession started. America’s FTE jobs ratio is still down by 5.10 from its peak, and is only 0.56 above its low point of the cycle,” he reminds us. “In contrast, at the same point during the Reagan recovery, the FTE jobs ratio was 2.01 above its prior high, having risen by 4.80 from its nadir.

“During the first 76 months of the Reagan recession/recovery, the value of the dollar in terms of gold actually went up by 6.47%. During the equivalent period during the Bush 43-Obama recession/recovery, the gold value of the dollar fell by 56.90%.

It’s a long commentary. He further explains the above points, the fallacies of the Federal Reserve’s continuous money-printing policy, and more. All of which slow down the nation’s economic recovery and the creation of jobs.

Do yourself a favor and read his full analysis here.

From the Coach’s Corner, editor’s picks for related reading:

• Why Federal Reserve’s QE3 Won’t Help U.S. Economy
• Why Is Transparency Crucial at the Federal Reserve?
• Obama’s Broken Promise for Transparent Government – Study

“We hope that you are enjoying having your children graduate from college and come home to live in your basements.”

-Lewis Woodhill

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

 

Urgent Plea for the Media and Nation’s Leaders from a Wise Teenager

 

March 9, 2013

“Congratulations America! With the sequestration implemented, we finally cut spending! Right? Wrong! Unfortunately, the American public has just been deceived by politicians and the mainstream media.”

-Charlie Kirk, a concerned teenager 

Can you believe such insights from a 19-year-old? In his post entitled, “How Baseline Budgeting is Bankrupting My Generation,” Mr. Kirk gives a primer on how elected officials are destroying his future and America’s economy.

It was published on FindLaw – Legal Professional News and Townhall.

“For the sake of my generation, I hope Washington and the mainstream media begin to tell the truth about why government spending is out of control,” he wrote. “Otherwise, today’s youth will become the first generation to be worse off than the previous generation.”

Mr. Kirk argues that Congress and President Obama talk about sequestration as though they’re actually about cutting their spending. He successfully argues that it’s not true – they’re misrepresenting their fiscal behavior.

Such temerity from a teenager – he says the meaning of spending cuts depends on your definition of the phrase.

“During the past few weeks, we have been told these sequester ‘cuts’ will be detrimental to firefighters, teachers and seniors,” wrote Mr. Kirk. “In order to realize what they mean by a ‘cut,’ we must first look at the definition of ‘cut.’”

Obviously, he’s pragmatic thinker.

“A cut, according to Washington math, means a reduction in the amount of increased spending,” he stated. “The mainstream media and demagogues in Washington are trying to keep our citizens in the dark by neglecting to point out that the net result of these ‘cuts’ is actually an increase in spending!”

Baseline budgeting

The 19-year-old explains baseline budgeting.

“The beginning of baseline budgeting started in 1974 with the Congressional Budget Act signed by President Nixon,” he pointed out. “This bill required the Office of Management of Budget to release projections of federal spending for the upcoming fiscal year.

“These projections are designed to naturally anticipate population growth, inflation and other market tendencies,” he wrote. “When baseline budgeting was implemented, it gave Congress a ‘baseline’ of spending from the previous year.

“For example, if Congress allocated $50 billion last year to the Department of State, then the next year their budget would automatically start with the ‘baseline’ of $50 billion.

“When you incorporate the automatic increases in spending, for example, a 10 percent increase, then spending would increase to $55 billion without Congress acting at all,” he wrote. “This system of budgeting is extremely dangerous for many reasons.”

Ramifications

He warns the federal spending could increase by 100 percent in 10 years, if it’s automatically increased annually – even though Congress will continue to fail to vote on such increases. Mr. Kirk knows that federal expenditures – on autopilot – balloon by 7 percent each year.

Using a car metaphor, this means the government is out of control and won’t be able to bring the heavy spending to a halt.

“Where are the leaders who have the courage to disengage this dysfunctional cruise control and put on the brakes?” he asks. “Baseline budgeting is dangerously deceptive to the American people because while politicians and the media talk about spending cuts, government spending and borrowing is actually increasing adding to the debt being passed down to my generation.

“Baseline budgeting is bankrupting my generation and stealing the future from children not old enough to vote yet,” he adds. “Big government advocates love baseline budgeting because they can increase spending while, in the next breath, proclaim they cut spending!”

He illustrates his point about disingenuous government spending by comparing the politicians’ practice with a hypothetical American family that has to cut its budget to survive.

You’re invited to read it at Findlaw.com.

It was heartwarming to learn that young America has such an astute spokesperson. He’s right. The media, Congress and President Obama need to do the right thing.

Postscript

The only thing I’d add to Mr. Kirk’s comments is that the government-spending nightmare is horribly exacerbated because the U.S. Senate hasn’t passed a federal budget in four years.

The House of Representatives has done its budgeting homework each year. It continually sends its budget proposals to Senate Majority Leader Harry Reid, but he refuses to allow a budget discussion. Hence, no Senate vote and no federal budget. Meantime, the nation’s deficit is approaching $17 trillion.

It’s unconscionable.

Furthermore, the news media should do its job to report Mr. Reid’s shocking behavior, and the consequences. Members of the Senate should openly discuss the federal budget and demand to vote on it. Mr. Obama should submit affordable ideas and work with Congress.

From the Coach’s Corner, Mr. Kirk is the founder of Turning Point USA, www.turningpointusa.net, “a national student organization dedicated towards educating young people about fiscally conservative values,” according to the Web site. You’ll discover a bevy of excellent commentaries by our leaders of the future.

“I have come to the conclusion that politics is too serious a matter to be left to the politicians.”

-Charles de Gaulle

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

 

Why Uncertainty Continues for U.S. Business and Workers, Alike

Reasons include 11 states have more welfare recipients than job holders in this era of entitlement

 

Jan. 5, 2013

Developments indicate the U.S. has lost its way. There’s no hope for beleaguered businesses and workers unless effective measures are implemented immediately.

The last jobs report for 2012 by the Bureau of Labor Statistics (BLS) showed job growth is barely keeping pace with the population growth. The unemployment rate remains high at 7.8 percent.

The BLS also listed the professions with the highest and lowest unemployment rates. The highest unemployment rates are in construction, sales and transportation. The lowest unemployment rates are in finance, healthcare and social services.

BLS: involuntary part-time workers

Also, earlier in December 2012, the BLS reported 8.2 million Americans were under-employed – they had to settle for part-time work. Unfortunately, that’s twice as high as the number of involuntary part-time workers in 2006.

Yes, the latest BLS report of an increase of 155,000 jobs in December is welcome, but that’s still pitiable news about the so-called Obama recovery. The number of jobs created in December is actually less than the month before – there were 166,000 new jobs in November.

Only 1.84 million jobs were created in 2012. There was no improvement over 2011 when Mr. Obama’s economy only produced 1.84 million jobs.

At such a mediocre pace, the pre-Great Recession success won’t be attained until 2019. That’s terrible news for the millions of unemployed and involuntary part-time workers.

Conference Board’s 2 cents

What do the nation’s major employers say about this fiscal quagmire?

“The current moderate pace of hiring could be sustainable if companies believe that economic growth is poised to accelerate a bit in the second half of the year as the fiscal drag wanes and the housing recovery strengthens,” said Kathy Bostjancic, director of macroeconomic analysis, for the Conference Board.

The Conference Board is an association comprising about 1,200 public and private corporations from 60 countries.

“The key to boosting the labor market is stronger demand – a task made slightly more difficult with new higher withholding rates,” she added. “Additional uncertainty surrounding the next round of political wrangling over the fiscal budget also leads businesses to be hesitant in hiring new workers.”

Her bottom-line: “Weakened business and consumer confidence doesn’t bode well for any acceleration in the hiring trend.”

Fiscal Cliff deal

Don’t expect good results from the Fiscal Cliff deal cut by Congress and the president. All it did was create higher taxes for individuals earning $400,000 and couples making $450,000. Many of those are small businesspeople – A.K.A. employers.

So nothing was achieved.

The nation’s debt is more than $16.4 trillion and climbing. The House of Representatives passed a budget and sent it to the Senate, where it was ignored. The Senate, under Senate Majority Leader Harry Reid, has not taken a vote on the federal budget in more than three years.

Messrs. Obama and Reid are oblivious to the fact that red ink always follows poor planning.

Further, instead of showing an interest in putting a halt to the heavy spending and the $16 trillion debt ceiling, Mr. Obama and Democrats are signaling they’ll seek more tax increases.

So look for more business angst and waste – in money and time – instead of real progress.

Escalating entitlement mentality

Workers and businesses are increasingly burdened – having to underwrite an entitlement mentality. Why?

Eleven states have more people on welfare than they have working. That was revealed in the Nov. 25, 2012 issue of Forbes by writer William Baldwin. (See: Do You Live In A Death Spiral State? – Forbes)

The 11 states:  California, New York, Illinois, Ohio, Maine, Kentucky, South Carolina, Mississippi, Alabama, New Mexico and Hawaii.

For every 100 workers in California, there are 139 residents are drinking from the welfare trough. Is it a coincidence that seven of the 11 states backed Mr. Obama in the election?

Avalanche of new regulations

Federal agencies are required by law to announce their proposed regulations that affect the economy by each April and October. This process allows dozens of bureaucracies to circumvent oversight by Congress.

Guess what?

If you’re a businessperson coping with the shortcomings of the Obama Administration, you’ll be shocked by two developments:

Firstly, the Obama Administration ignored the law. It released its 2012 agenda for regulations on the Friday just before Christmas. That meant relatively few people would even notice the furtive, onerous administration charade because of the holidays.

Secondly, the government’s Web site has introduced more than 5,500 new regulations comprising thousands of pages. The regulations will affect nearly every industry.

The American Action Forum estimates the aggregate cost to implement the regulations will be $123 billion.

The Obama Administration’s morass shows questionable priorities in other ways. As of this writing, some 50 percent of the deadlines – for implementing ObamaCare and the Dodd-Frank law – have been ignored or missed.

No wonder business and workers, alike, are apprehensive. No business would succeed if it was operated like Mr. Obama and Democrats conduct their affairs.

From the Coach’s Corner, see solutions by a noted economist here.

“I’m here to tell you, some time in the next couple of months, we’re going to be creating between 250,000 jobs a month and 500,000 jobs a month.”

-Joe Biden, at a Pennsylvania fundraiser, April 23, 2010

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.  

 

For 23 Million Americans, Labor Day Isn’t a Holiday to Celebrate

 

Sept. 2, 2012

For millions of American workers there are few, if any, reasons to celebrate Labor Day as a holiday.

The first Monday in September “is dedicated to the social and economic achievements of American workers,” says the U.S. Dept. of Labor (DOL) Web site.

New York City celebrated the first Labor Day holiday back on Sept. 5, 1882. During the ensuing 12 years, 23 other states began observing Labor Day. On June 28, 1894, it was made a national holiday by Congress.

“It constitutes a yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of our country,” adds the DOL.

But wait, data shows there are 23 million Americans who are unemployed or under-employed. The U.S. is not strong economically, nor is there enough prosperity even though the NBER says the Great Recession ended in 2009.

Another reason to worry about the economy: A 2012 study says most jobs added since the Great Recession are indeed low paying – even though the majority of lost jobs were at family wage levels. That’s right – the good jobs have not returned.

Ironically, a liberal organization, the National Employment Law Project, released its findings in the middle of the 2012 presidential campaign.

“The overarching message here is we don’t just have a jobs deficit; we have a ‘good jobs’ deficit,” said Annette Bernhardt, the study’s author.

The report considered 366 occupations listed by the DOL. Jobs paying $13.84 to $21.13 per hour – considered decent wages – are among the 60 percent of lost jobs. But they only constitute 22 percent of the new jobs.

Moreover, the jobs paying $7.69 to $13.83 per hour were part of the 21 percent of lost jobs. But now, they account for 58 percent of the gain in new jobs. The median pay of the 58 percent of new jobs is only $10.97 an hour.

The study shows most of these jobs have been filled by seasoned workers because they couldn’t find jobs that pay them as well before the recovery began. Admittedly, the high unemployment rate stems partly from deficient worker skills and education. But the sour economy weighs heavily on the unemployed.

According to a Harvard study, here’s another issue to solve: Government spending causes companies to cut back.

So clearly, the nation needs a strong economic plan. Even Steve Jobs gave economic advice to President Obama. (There are also some choice words about economic policy from Intel’s CEO.)

Only if Mr. Obama listens or if Gov. Romney is elected president, will we have reason to celebrate Labor Day in future years.

From the Coach’s Corner, if you’re one of the unfortunate ones looking for a job, here are some proven ideas:

• Career Strategies: How to Get a C-Level Job
• Discouraged in Job Hunting? Powerful Tips for the Best Job
• Stand Out: Get a Job Interview with a Great Resume

“A part-time worker is fully employed, half the time. In other words, they are part-time unemployees.”
-Jarod Kintz

 

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

 

6 Nobel Laureates Among 673 Economists Back Romney’s Economic and Jobs Plan

 

Updated – Oct. 24, 2012 (This updates the number of economists from 400 to 673 and Nobel laureates from five to six. The original article was published Aug. 16, 2012.)

Nearly lost in all the gutter politics engineered by President Obama and his supporters are two important elements. That would be meaningful discussions about the issues, and the endorsement by 673 economists – including six Nobel Prize winners – of Gov. Romney’s economic and jobs plan.

“We enthusiastically endorse Governor Mitt Romney’s economic plan to create jobs and restore economic growth while returning America to its tradition of economic freedom,” wrote the economists in a statement.

“The plan is based on proven principles: a more contained and less intrusive federal government, a greater reliance on the private sector, a broad expansion of opportunity without government favors for special interests, and respect for the rule of law including the decision-making authority of states and localities,” they added.

The six Nobel laureates:

• Gary Becker
• James Buchanan
• Robert Lucas
• Robert Mundell
• Edward Prescott
• Myron Scholes

Why the endorsement?

The economists predict the Romney plan would result in six achievements:

1. Reduce marginal tax rates on business and wage incomes and broaden the tax base to increase investment, jobs, and living standards.
2. End the exploding federal debt by controlling the growth of spending so federal spending does not exceed 20 percent of the economy.
3. Restructure regulation to end “too big to fail,” improve credit availability to entrepreneurs and small businesses, and increase regulatory accountability, and ensure that all regulations pass rigorous benefit-cost tests.
4. Improve our Social Security and Medicare programs by reducing their growth to sustainable levels, ensuring their viability over the long term, and protecting those in or near retirement.
5. Reform our healthcare system to harness market forces and thereby reduce costs and increase quality, empowering patients and doctors, rather than the federal bureaucracy.
6. Promote energy policies that increase domestic production, enlarge the use of all western hemisphere resources, encourage the use of new technologies, end wasteful subsidies, and rely more on market forces and less on government planners.

“In stark contrast, President Obama has failed to advance policies that promote economic and job growth, focusing instead on increasing the size and scope of the federal government, which increases the debt, requires large tax increases, and burdens business with many new financial and health care regulations,” they explained.

“The result is an anemic economic recovery and high unemployment. His future plans are to double down on the failed policies, which will only prolong slow growth and high unemployment,” they added.

Their complaints about Obama

The economists also fault Mr. Obama for six reasons:

1. Relied on short-term “stimulus” programs, which provided little sustainable lift to the economy, and enacted and proposed significant tax increases for all Americans.
2. Offered no plan to reduce federal spending and stop the growth of the debt-to-GDP ratio.
3. Failed to propose Social Security reform and offered a Medicare proposal that relies on a panel of bureaucrats to set prices, quantities, and qualities of healthcare services.
4. Favored a large expansion of economic regulation across many sectors, with little regard for proper cost-benefit analysis and with a disturbing degree of favoritism toward special interests.
5. Enacted health care legislation that centralizes health care decisions and increases the power of the federal bureaucracy to impose one-size-fits-all solutions on patients and doctors, and creates greater incentives for waste.
6. Favored expansion of one-size-fits-all federal rulemaking, with an erosion of the ability of state and local governments to make decisions appropriate for their particular circumstances.

See the list of economists.

Instead of campaigning on Mr. Obama’s indefensible economic record, he and his supporters have ostensibly tried to throw smoke screens with a barrage of personal attacks on Mr. Romney – everything from accusing him of being a tax-dodger to a disingenuous innuendo about putting blacks “back in chains.”

Little wonder it’s a tight race sans the 2008 promise of “hope and change.” History shows that in tight contests, the incumbent always loses.

From the Coach’s Corner, see this portal’s economic analysis in the Op Ed section by another economist, Dr. Peter Morici.

Plus, here a couple of related topics:

• Fiscal Fact-Check: Deficit, Social Security, and Medicare
• Is it Too Much to Ask For Civility and Honesty from Mr. Reid and the Press?

“On account of being a democracy and run by the people, we are the only nation in the world that has to keep a government four years, no matter what it does.”

-Will Rogers

 

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Author Terry Corbell has written innumerable online business-enhancement articles, and is also a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Can Immigrants Help Jumpstart U.S. Economy? Senators and Study Say Yes

 

First, the good news: Some Democrats and Republicans in the U.S. Senate have been working together and introduced a bill that might help the economy.

Now, the bad news: The bill has been languishing in committee for months.

Yes, members of the Senate have introduced bipartisan legislation, Startup Act 2.0, which would make it easy for tech-minded immigrants to stay in the U.S. after they launch new businesses. It’s co-sponsored by U.S. Sens. Marco Rubio (R-Fla.); Chris Coons (D-Del.); Jerry Moran (R-Kan.); and Mark Warner (D-Va.).

Immigrant stays are typically limited to six years.

In 2011, immigration policy was eased to allow immigrants to launch companies that would sponsor their own H-1B visas. So, the lawmakers want to take another step in immigration reform.

However, detractors of the bill worry what to do with the immigrants if their enterprises fail – a common worry about any new business.

Meantime, immigration reform will lead to significant benefits for the U.S. economy, according to a group of business leaders and bipartisan mayors. The group, Partnership for a New American Economy, released a study 2012 concluding that in 2011 foreign-born inventors were responsible for 76 percent of patents at the top 10 universities that spawn patents.

The obvious conclusion: The new companies that evolve from such patents create jobs and enhance the nation’s economic climate. Patents include metals that can be molded like plastic and better ways to purify seawater.

New York Mayor Michael Bloomberg, the partnership co-chair, asserts the results are “indisputable proof of the enormous contribution of immigrants in developing the new technologies and ideas needed to renew the U.S. economy and create American jobs.”

“American universities are doing their part in attracting and educating the world’s top minds, but our broken immigration laws continue to push them to our competitors,” he adds.

The 2012 30-page report is entitled, “Patent Pending: How Immigrants Are Reinventing the American Economy.”

The University of California was No.1 among U.S. universities in generating patents – 369.

The study’s salient conclusions:

• More than three out of every four patents at the top 10 patent-producing US universities (76 percent) had at least one foreign-born inventor.
• More than half of all patents (54 percent) were awarded to the group of foreign inventors most likely to face visa hurdles: students, postdoctoral fellows, or staff researchers.
• Foreign-born inventors played especially large roles in cutting-edge fields like semiconductor device manufacturing (87 percent), information technology (84 percent), pulse or digital communications (83 percent), pharmaceutical drugs or drug compounds (79 percent), and optics (77 percent).
• The almost 1,500 patents awarded to these universities boasted inventors from 88 different countries.

Previously, the group issued another study showing how other countries have designed immigration-recruitment strategies to benefit their economies. The nations include Australia, Canada, Chile, China, Germany, Ireland, Israel, Singapore and the United Kingdom.

The nine countries admit from 60 to 80 percent of foreign students on economic needs while the U.S. opens its doors to 7 percent for economic reasons.

As part of the advocacy for immigration reform, more than 100 university presidents sent a letter to Congressional leaders and President Obama advocating a bipartisan immigration solution.

The group’s recommendations:

1. Granting permanent residency (green cards) to foreign students who earn graduate degrees in STEM (science, technology, engineering and math) fields, where 99 percent of the patents naming a foreign-born inventor were issued.
2. Creating a visa for foreign-born entrepreneurs having U.S. investors and wanting to start companies employing U.S. employees.
3. Raising or removing the cap on H-1B visas, currently set at 65,000 (the group notes that the 2012 cap was hit in only 10 weeks).

My sense is the group is right. It’s been widely believed for years that America needs more students majoring in science, engineering, mathematics and technology. They’re not being homegrown.

In another column, Keys to Economic Development: Managing Ignorance, I wrote:

“America’s expertise in science and technology is fast deteriorating, according to a study by the National Academy of Sciences. The report was written by a group of top corporate executives, educators and scientists and is entitled, “Rising above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future.”

In essence, the panel of experts sets four goals:

• Improve math and science education in grades K-12.
• A more cordial milieu for science for college and post graduate studies.
• Increase federal funding for scientific research.
• Encourage the growth of family-wage jobs in evolving industries with tax incentives and other fiscal tools.

It wasn’t surprising that the report identified two Asian countries, India and China, as among the nations that will surpass the U.S. in job creation and innovation.

From the Coach’s Corner, here are related topics:

• Has China Prompted U.S. Tech Innovation and Funding?
• Study: Unemployment Stems Partly from Deficient Worker Skills, Education
• Risk Management – Lawyer Explains Basics in Protecting Intellectual Property

“Why don’t they pass a constitutional amendment prohibiting anybody from learning anything? If it works as well as prohibition did, in five years Americans would be the smartest race of people on Earth.”

-Will Rogers 

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry. 

7 Capitalism Principles for Economic Growth, Prosperity

 

Employers are discouraged from hiring largely because of uncertainty created by public policies. That includes uncertainty – created by ObamaCare – in costs and taxes.

Add to them, policies leading to tepid growth in U.S. gross domestic product. Of course, global concerns include the European Union economic crisis, China’s banking and housing headaches.

They all cause an understandable fear about a new recession.

Employees and would-be workers are discouraged. The unemployment rate has remained above or near 8 percent for nearly four years. Many new jobs created during the past three+ years are only part-time. College graduates can’t get meaningful jobs – ask most Starbucks employees. 

A widely quoted economist and Op Ed contributor, Dr. Peter Morici, says the real unemployment rate is about 18 percent. 

As a result, consumer confidence continues to drop, according to the Thomson Reuters/University of Michigan index. That’s why household spending for products is down – representing 70 percent of the nation’s economy. 

These nightmarish trends prompt discussion of these dysfunctional public policies: 

1. Abysmal energy policies and billions for failed solar energy startups with phony job descriptions (the government believes a bicycle repair person works at a “green” job)
2. Class warfare – increasing taxes on the wealthy (Nonpartisan Study: Obama’s Tax Plan Hits 53% of Business Earnings)
3. Costly ineffective business regulations
4. Expensive ObamaCare mandates
5. $16 trillion federal budget deficit
6. Stimulus spending
7. Temporary tax cuts

Conveniently forgotten by the administration, Mr. Obama declared that he will improve the $600 billion trade deficit and create 2 million jobs hasn’t worked. Americans are sending their money abroad for goods and oil, but the dollars don’t boomerang back to the U.S. We need a 5 percent growth in GDP each quarter, but each of these failed policies only lead half or less of that rate.

All of these need to be reversed for positive economic environment. 

In addition, there needs to be a wide-acceptance of seven capitalism principles and business: 

1. Businesses are not launched to create jobs.
2. Businesses are established to create products and services that customers will buy.
3. Businesses can thrive in competition – to keep the cost of goods and services affordable.
4. Businesses with savvy management are profitable – if not, the companies fold and employees are laid off.
5. Businesses that enjoy success invest in new equipment and hire employees.
6. Businesses that are productive will attract investment and grow.
7. Businesses experiencing growth will fund retirements and pay taxes. 

From the Coach’s Corner, if you buy into these principles, here are profit-making strategies: 

• Business Success Checklist to Work Smarter, Not Harder
• 8 Simple Strategies to Give You Pricing Power
• 12 Tips for Profits to Keep Your Business Dreams Alive
• Management Strategies for a Successful Turnaround

“Capitalism is what people do if you leave them alone.”

-Kenneth Minogue

 

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

 

Dow’s Flirtation with 14,000 Doesn’t Mean Economy is Better

 

Updated Feb. 28, 2013

While it’s heartening, don’t get exuberant over the Dow Jones Industrial Average passing above 14,000. The lofty height doesn’t mean the U.S. has a healthy business climate, despite what Wall Street analysts hope. 

The nation has huge economic structural issues.

Let’s get real. The Federal Reserve’s practice of printing money only offers false hope. The U.S. Commerce Department just reported the nation’s economy is stagnant – it shrank in the last quarter.

A new study reveals an alarming trend — why startups no longer lead in job creation.

True, workers with 401 (k)s are happy with the market. But my economic view is based on what I see happening at a common-sense, Main Street level.  The flirtation with 13,000 only means investors aren’t currently worried about two developments: 

1. The Euro-zone economic issues.
2. China’s central banks have eased lending requirements. 

Everyone seems to forget that much of Europe is mired in a recession. 

Here in the states are several economic ramifications:  Poor public policy, e.g. Keystone Pipeline and other developments, as well as adverse current events mean crude-oil prices are skyrocketing. The resulting price at the pump will not help the economy. The average American motorist will cut back on other expenditures and necessities with gas at $4 a gallon and climbing. 

Nordstrom is doing well and rightfully so. But the middle class is disappearing and lower-income shoppers favor retailers like Wal-Mart. And Wal-Mart has been a loser on Wall Street. That’s a result of weaker sales, its worst-ever February, and a comparatively dismal outlook. 

Unemployment is still high. Don’t buy into the 7.9 percent unemployment rate. The true figure is at least 15 percent. Employment rolls are fattened because millions of Americans are working as temps without benefits. Far too many people have given up and are trying to freelance. 

At a record rate, millions of Americans aged 62 have filed for early benefits.

Plus, even for those lucky to have a job, wages are flat. But companies are losing much of their intellectual capital as age discrimination is rampant in favor of younger workers. Ironically, savvy employers know that “slow motion gets you there faster.” 

Don’t be misled about the rate of home sales in some areas. However, sales increases were attributed to investors capitalizing on distressed prices as sales prices continue to drop. Not good. Look for another round of foreclosures now that the deal has been signed between lenders and states attorney generals.

Besides, the average victim from the predatory mortgage practices only got a settlement of $2,000. 

Long term, the payroll tax extension will only hurt workers. It means retirees will get less money from Social Security when they leave work. 

What’s needed is economic vision in public policy to benefit this nation. (For Op Ed economic and public policy analysis by noted economist Peter Morici, click here.)

From the Coach’s Corner, consider 12 tips for profits to keep your business dreams alive. 

A blind person asked St. Anthony: ”Can there be anything worse than losing eye sight?”

He replied: “Yes, losing your vision!”

 

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Is Economy Marginalizing Thanksgiving as a Holiday?

 

Grateful for their religious freedom, 53 pilgrims enjoyed the first Thanksgiving nearly 400 years ago in Plymouth, Mass. They were survivors of the original 100 separatists from their arduous Atlantic Ocean journey aboard the Mayflower from Southampton, England.

Originally, their destination was Virginia, but they disembarked in Mass. It was a severe winter. But they survived with the help of Native Americans, who taught them valuable lessons – how to live off the land.

A year later in 1621, for three days, the pilgrims and Indians were able to celebrate their good fortune. Initially, it was a religious Thanksgiving.

Over the years Thanksgiving became an American tradition as an opportunity for gratitude – enjoying a plentiful meal with family and friends – all while giving thanks.

President Lincoln declared it a holiday in 1863 on the third Thursday of Nov. It was switched to the fourth Thursday in Nov. during the 1940s.

So with the exception of some professions such as journalism, airlines, first responders and healthcare, it’s been a holiday.

But in the quest for profits that’s changed. Initially, it was just workers in retailing have to work Thanksgiving to prepare for Black Friday. That’s the day retailers start earning green in the holiday shopping season.

It’s one thing to be altruistic to serve Americans who need prescriptions for their illnesses. But starting in 2011, the nation’s largest retailer, Walgreen, is open Thanksgiving for what it calls one-day-only deals to jumpstart its Q4 sales. For similar reasons, its competitor Rite Aid was open, too.

There have been many indicators many people can’t take advantage of such sales. We’re turning into a nation of haves and have nots.

My sense is that many fortunate Americans are missing some other important signs – they’re reminiscent of the Great Depression: 

• We seem to have forgotten about America’s Hoovervilles. In pointing a finger at President Hoover for his inability to prevent economic chaos, Hooverville was a term coined by Democrats to describe the shanty towns of unemployed Americans. Old newspapers that were used to keep unemployed people warm were referred to as Hoover blankets. Worn out shoes were lined with cardboard and called Hoover leather.
• In 1932, World War I veterans marched on the nation’s capital. Twenty-five percent of the nation’s budget had been swallowed by veteran benefits, but many veterans were destitute from unemployment. They demanded early payment for their benefit promised for 1945.
• Economic hardship exacerbated by a drought, forced thousands of Oklahomans to seek a better future – dignity, jobs and land – by migrating to California.

For poignant visual reminders, see this photo essay.

Fast forward to today. Some 100 million Americans are either in poverty or close to it, according to the U.S. Census Bureau in 2011. We’re not talking about new immigrants. We’re talking about nearly 33 percent of Americans – most have high school or college educations.

Many can’t get a job or they’re under-employed. Many are baby boomers whose jobs disappeared in the new service economy. Others have suffered from deteriorating living standards and moribund wages.

It’s true many have not prepared for globalization and the digital age (Study: Unemployment Stems Partly from Deficient Worker Skills, Education).

But there are other reasons. Unlike the New Deal policies of Franklin Roosevelt, the federal government is a hindrance.

The trade deficit is out-of-control. So is the federal budget.

‎Additionally, consider federal regulations. Cabbage, for example, is a commodity many will enjoy on Thanksgiving – however, the U.S. government bureaucracy uses 26,911 words to regulate it.

Compare the cabbage example with the Declaration of Independence: A mere 1,300 words.

Or how about the U.S. Constitution and its amendments: 7,818 words.

But the federal government won’t balance the budget. Politics – an infinite pursuit for power – stands in the way. What’s worse, Congress hasn’t passed even one budget during the tenure of President Obama.

The divergence of the poor and affluent is a huge threat. It’s a menace to our nation’s core values as expressed in our Declaration of Independence – because we’re failing to honor a legacy.

Even though the pilgrims of 1621 showed us the way. They didn’t let politics and poor public policy disillusion them. They found a way to exist harmoniously with their Native American neighbors, worked hard, practiced stewardship of their assets and reaped a bountiful harvest. That’s why they had reasons to celebrate for a Happy Thanksgiving.

When will we? At the least, if our issues aren’t solved, the pilgrims would be aghast.

From the Coach’s Corner, here are places to start:

• Federal Reserve Typifies What’s Wrong with Economy
• Biography: Will President Obama Listen to Steve Jobs on the Economy?
• How CEOs, Taxes and Policymakers Fail the U.S.

“Dependence begets subservience and venality, suffocates the germ of virtue, and prepares fit tools for the designs of ambition.”

-Thomas Jefferson

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

 

What Do Small Business Owners Need from Washington State Policymakers?

 

Updated Feb. 1, 2012

Washington state legislators are getting an earful from small-business owners. But will lawmakers listen in the 2012 legislative session?

Washington state’s small-business owners have voiced their concerns over six major public-policy issues, as a result of a Seattle-area conference held by respected think-tank Washington Policy Center (WPC). Their economic-related issues range from workers’ compensation to mandatory paid sick leave.

A detailed analysis was presented in a report to the Legislature.

“Nearly half of Washington’s work force is employed by small businesses,” said WPC President Daniel Mead Smith.

“These are the businesses struggling for survival right now, and they came to us with practical recommendations for how policymakers can make it easier for them to not only survive but grow and create jobs,” added Mr. Smith.

The conference held breakout sessions at Bellevue College.

“The result is a list of priority solutions, selected by small business owners, for solving the major problems with the state’s business climate and moving towards economic recovery,” wrote WPC Communication Director John Barnes.

Here’s the list of small-business owners’ issues:

Workers’ Compensation

1. Revisit voluntary settlement agreement, as passed in the state Senate in 2011
2. Do not raise rates for 2012 since L&I funds are in the black
3. Increase the fraud prevention and investigation efforts

Unemployment Insurance

1. Reform the displaced worker retraining program
2. Implement a web-based portal to allow employers to access current claims data, including current contact information for unemployed workers (similar to the system used by the Department of Labor and Industries)
3. Educate small business owners about the “shared work program”

Regulatory Reform                                          

1. Review environmental regulations to ensure that Washington rules don’t exceed federal regulations
2. Legislature should not grant general rule making authority to agencies, but rather be specific about rules to be put in place
3. Legislature should listen to and follow up on State Auditor Office reports on regulatory reform (tie)
4. Sunset provisions for regulations (tie)

Health Care

1. Tort reform
2. Limit the number of state-required health mandates
3. Repeal federal health care law

Transportation

1. Do no harm — don’t reduce lane capacity
2. Protect highway tolls and taxes for highway purposes
3. Make congestion relief a policy goal (tie)
4. Performance-based spending on transportation (tie)

Mandatory Paid Sick Leave

1. Legislature should not follow Seattle and should not enact statewide paid sick leave
2. State should pre-empt local government regulations on labor laws
3. Business impact statements on laws like mandatory paid sick leave should be required

“The conference was co-sponsored by Verizon, Regence, Wells Fargo, Walmart, the Puget Sound Business Journal, Berntson Porter and Co., Columbia Bank, the Washington Health Foundation, NCM, Associated Builders and Contractors of Western Washington, Baldwin Resource Group, and Noteworld Servicing Center,” Mr. Barnes indicated.

”More than 30 chambers of commerce and trade associations from around the state co-presented the conference,” he added.

This was WPC’s fifth conference hosted since 2003. Rarely has the majority of the legislators listened to small business. Let’s hope they start now for economic development and the creation of jobs.

From the Coach’s Corner, in the past I’ve written about the results of the WPC conferences. I’ve also voiced similar concerns in this portal’s Public Policy section.

“People try to live within their income so they can afford to pay taxes to a government that can’t live within its income.”

-Robert Half

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

 

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