Thursday, August 16, 2012

A Canadian's Advice To U.S. Presidential Hopefuls: It's The Economy, Seriously

Jobs

I am a Canadian and as such I can't vote in the U.S. presidential elections; yet, what happens south of the border with our largest trading partner affects us greatly. So, I have some simple advice to whomever wants to be sworn in as the next president of the United States in January 2013—have a concrete and workable plan to improve the economy and get people back to work. That ought to be his first priority; everything else is secondary, at least on the domestic front. Seriously. Having such a national conversation would make persons more hopeful and optimistic, which is what most normal persons now need and desire.

A presidential candidate has to seriously give some hopeful signs that he can do something about the bleak unemployment numbers, which is at 8.3%, equating to 12.8 million persons who are not employed. That is the official, or U-3 rate, which does not give as complete a picture as the U-6 rate. The U-6 unemployment rate is 15%, and it has not been below 10% since May 2008, and has generally stayed over 15% since May 2009.

The more-significant U-6 rate better defines the economy, since it includes workers who are forced to work part-time and who are working less than the desires hours—these are called in government accounting  "marginally attached workers and those working part-time for economic reasons"  If you add these "marginally attached workers (8.2 million persons) to the official 12.8 million persons who are unemployed, you arrive at  21 million persons who are either unemployed (no work at all) or underemployed (not working to desired capacity). Add in the discouraged workers and you arrive at a figure closer to 23 million.

We have to put that number in perspective. According to official U.S. Department of Labor numbers, the civilian labor force is approximately 155 million persons. That means 155-million persons are willing and able to participate in the civilian labor force. If we use simple math, and multiply the U-6 rate of 15% by 155-million persons of the labor pool, you arrive at a figure of 23.25 million persons. That means more than 23 million persons are either 1) unemployed; 2) marginally employed; or 3) discouraged, no longer seeking employment. Wow! That's not an insignificant number.

I am not sure why the fact of more than 23 million persons not working to their ability is not a major news story; and why it has not been at the top of presidential and congressional priorities. (Have we been in a narcoleptic trance the last few years?) It's more than an economic adjustment or a blip in the economic cycle of nations, as some have cynically or casually suggested. Behind the numbers are real people, lest we forget. Why they have been forgotten is a mystery. If I were cynic, I might throw a few suggestions your way; but then again, that never solved anything.

It's time to get back to work. It's time to bring hope to the great nation of America. It's time to solve the problem—one that has been a real heartache for tens of millions of Americans, one that won't easily go away unless the president, whomever he might be after the November 6th elections, has the will, the authority and the wisdom to do something.

2 comments:

  1. One of the possible solutions to these problems is higher taxes. Between 1950 and 1963, the tax rate for the highest income bracket was over 90%. That was a period of prosperity and growth.

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    Replies
    1. Yes, it was, but I doubt that higher taxes will ever gain passage in the U.S. Congress. There are solutions: the government has to create a positive climate to encourage investment; and businesses have to hire more qualified persons, instead of sending jobs out of the country. I am not sure if outsourcing jobs to China, India and, even, Israel is the best-possible way to ensure that America is prosperous. I have written about outsourcing, and the problems associated with it are many, including poor quality.

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