Friday, September 10, 2010

Further comments on employment

Please read this post in conjunction with my basic post "What is this blog all about?".

I say that the only way to solve our debt/unemployment problem is to get our manufacturing jobs back from China and other overseas locations.  Maybe a better word is "take".  We have to take the jobs back from China and other overseas locations. 

Government officials are scratching their heads and looking everywhere for ways to solve the debt/unemployment problem.  They are looking everywhere except in the correct direction which is to face up to our self-created problem, and work to re-establish/increase domestic manufacturing of consumer, commercial, and industrial goods. 

The especially insane aspect of the situation is that there were tax incentives and tax benefits in place to assist corporations to build new manufacturing facilities overseas, and therefore to transfer jobs overseas.  Some of these incentives and benefits may have been removed.  However, others are still in place.  In his financial newsletter of September 21, 2010, Mr. Michael Shedlock states:

"We need to fix the corporate income tax structure that gives incentives to businesses to move jobs overseas.  Because of tax deferments, businesses pay less tax overseas than in the U.S.  To promote hiring in the U.S., we need to reverse that set-up."

So here is further proof that we are committing national economic suicide.  Why would the U.S. Federal government offer assistance to companies to encourage them to move jobs overseas?  It is a completely insane situation.

Some commentators hold the view that unionized manufacturing workers in the 1970s and 1980s were receiving excessively high wages and benefits, and that this situation forced manufacturers to shift employment overseas.  This view may be correct or it may be incorrect.  That is water under the bridge.  The situation in 2010 is that there is tremendous unemployment in the United States, probably at least double the official government figure of 10%.  I am sure that unemployed people would be happy to accept manufacturing jobs, at reasonable wages.

Other commentators emphasize very high wages and very generous pension benefits for unionized government workers as a major contributor to the current financial stress faced by states and cities. I agree that all levels of government have to reduce waste and excess in their expenditures. However the INCOME side of the equation is also important. Over the last 50 years, all levels of government have progressively lost trillions of dollars of tax revenue because jobs were sent overseas.

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