Unemployment - Unfolding National Crisis!


For What It’s Worth….    return

Here we examine the unemployment issues that Congress is either ignoring or unable to define a coherent strategy.  Obviously, congressional Republicans are resisting any solution that the administration might claim credit for during the next election cycle.  Regardless, here are some ideas that we can push for.

The national unemployment crisis is complicated and the causes are deeply rooted in our culture, education, trade treaties, foreign competition, ridged labor contracts and excessive public and personal debt.   Worst of all our politicians cling to pro and anti-business dogma and refuse to compromise!

If one "Googles" for causes of unemployment the results are all over the place. Here are a few bed-rock facts that are most in common from the professional observers. 

The Disgrace of H1b visa programs stealing American Jobs!

Regarding "Tax Breaks" to companies exporting jobs -

    So... what, specifically, are these tax breaks?  All the politicians are yakking about them but nobody is saying specifically what they are.  Precisely what laws or regulations need to be changed?  If no one makes a specific demand Congress will surely ignore it.  At Fogcutters we have searched for specifics but have come up empty handed.  Except for the following gross example!

    H1B and L1 visa holders!  These are work permits for foreign workers to come to America and often replace American workers here.  There are over 1,202,000 H1B visa holders and over 325,000 L-1 visa holders in the U.S.  Worse still, these numbers are climbing even while the nation's unemployment is at or near record levels.  The rationale for allowing H1B visas is that American companies claim that they can't find U.S. citizens with the needed skills.
    Unfortunately the standards for making these claims is so low (or loose) that challenges are few and far between.  Often companies badger their current American employees to train in order to obtain severance packages when they are laid off. 

    A dirty secret and hard facts are hard to come by.  Here is a brief summary of what often happens with the H1B and L1 visa programs. Some data may not be the most recent but the urgent nature is still real.
   a. Many of these workers come to America to learn how we do things and then return home and apply that knowledge to compete against us. 
   b. Many of these workers actually work for some second party or contractor and their wages are sent directly overseas and thus avoid paying state and federal income taxes or Social Security taxes as had the previous American workers they replaced.
   c. Many of the L1 visa holders are managers with instructions to hire only those of like race, age, national origin, etc.  Since L1 visa companies are technically based overseas they can avoid discrimination laws that would allow American workers to compete for American jobs.
  d. The H1B and L1 visa programs are not the same as "Green Card" programs. 

Please see additional links in the right hand column for specifics.  Due to the abuse of these programs, please consider this to be an important...
Ground Zero Issue we can demand that Congress must fix!

And now back to our original 7 factors hurting American employment.

1.  Treaties: NAFTA and other "Free Trade" agreements have benefited importers by providing cheaper goods but at the cost of American manufacturing jobs.  Free trade agreements are generally favored by liberals and businesses seeking to outsource their manufacturing.  Labor unions and American workers see the risk of job loss and stagnating wages. See N.Y. Times and Economic Policy Institute for further information. 

2.  Skills Gap: There are currently about 3.1 million jobs advertised across the nation but businesses are having trouble filling many openings.  The major reasons given by businesses are lack of education or experience and/or a regional shortage of skilled workers.

3.  Immobility: Workers are unable to move to where the jobs are because they are unable to sell their current homes.

4.  Government layoffs and veterans leaving the service compound the unemployment problem. Prior excessive government spending at all levels have strapped government's ability to sufficiently stimulate the economy or provide the necessary training for the unemployed.

5.  Attitudes: Too many currently unemployed feel that their re-training is someone else's responsibility. Critics of American businesses argue that companies should spend their enormous cash reserves to train new employees.  Rev. Jessie Jackson has suggested that the government should hire America's unemployed and pay them all $40,000 @ year to stimulate the economy.

6. Over regulation:  Businesses point to excessive and yet undefined new regulations as a major reason to delay possible expansions.  Expansion in foreign markets provides a better business environment.  Arthur Brooks, AEI, discusses this on CNBC.

7. Education apathy among America's youth.  Low reading, writing, math and science performance undercuts today's youth compared to other nations - particularly China, Japan and India.  Some say that it only takes two people to make a child but it takes a community to raise it  Let's go community! This is a serious cultural problem! (Also see #2 above!)

First of all, each and every unemployed person must have the inner power and unshakable desire to find the employment path suitable for themselves.  (See "Observations" on Fogcutters main menu.)  This writer was unemployed and/or underemployed for nearly 7 years while needing to re-event myself and retrain through the Dislocated Workers program.  If one's industry is shrinking then retraining to breach a skills gap is absolutely necessary!

Next, unemployment is stressful and therefore one must surround themselves with ONLY positive support from friends and family.  Anyone trying to find employment deserves honest support.  If there are those who are pulling you down you must either explain that it is unacceptable or avoid them.  Remember, "The Strong Survive and the Weak Languish."  Attitude means everything when it comes to regaining employment and, especially, avoiding unemployment in the first place.

The stagnant economy and lack of Congressional determination is creating a lot of difficulties and every avenue must be explored.  Below we present various programs.  Cash handouts do little to remedy many of the underlying causes and further the creation of a dependent, financially diminished underclass.

We must not abandon our unemployed.  That should be a lock!  Even if it may cost all of us more in cost of goods and taxes, we must turn back the underlying problems listed above.  Parents and the "community" at large must make every effort to keep our youth in school and provide and example of continuing education for ourselves.

Suggestions to Improve National Unemployment:

Ground Zero: Stop all further renewals of H1B and L1 visas until our unemployment falls below 5 1/2%.

1.  Require all persons receiving unemployment to participate in job training and skills improvement.  If their skills are actually up-to-date then they can participate in training others.  Even the unemployed can assist with free day care for others in training and actively interviewing.

2.  The government must resolve the housing crisis.  Without our home equity we are severely restricted in our ability to move to where new jobs are being created.  More on this subject separately.

3.  Enforce "Fair Trade Agreements" with all trading partners.  Here's the point- "they" want our business.  "They" won't get more business if the U.S. economy is weak.  The U.S. has for far too long been intimidated and coerced by partners who might threaten to stop buying our bonds.  Yes, we do have an excessive debt.  And, yes, it would hurt if foreign nations started cutting back on their purchases of U.S. debt.  Regardless, it's going to happen anyhow.  At this writing a second down grade of U.S. debt is pending.  Some of our trading partners are already moving to eliminate the dollar as an international benchmark for trading. 

4.  Enforce product safety laws and labor laws for all imported items. Other nations want to sell into our markets but their regulations are often so low that it puts American manufactures at a severe disadvantage.  Current treaties prohibit us from discriminating against foreign products even when we are spending our tax dollars to stimulate our own economy.  However, we CAN enforce product safety regulations like those applying to food products, in particular polluted sea food from China! 
     Also, American Samoa, a U.S. protectorate can label their goods as "Made in America" but are not required to adhere to U.S. working conditions and child labor laws. Legislation remedying this was persistently buried by Cong. Tom Delay!

5.  Prohibit the exportation of any further jobs without the employer paying the full load of retraining expenses.  Charging only for the "unemployment tax" does not sufficiently cover the damage done to both workers and community.

6.  Remove unnecessary regulations that are binding American businesses.  Many of the proposed regulations are just a collection of special interest agendas. Many sensible regulations are needed to prevent abuse of the environment and working conditions.  Politicians opposing regulations simply refer to various bills by name without itemizing just what they are objecting to.  This only confuses the issue!  We must require a clear explanation of just what each regulation is for and why.

7.  Challenge any new trade agreement that states it will allow us to export more goods. We must ask for and demand to know how many jobs will be conversely exported. Almost every "free trade" agreement has exported more jobs and economic welfare than jobs created.  The business lobby is always seeking cheaper goods. The government wants to hold down inflation rates and thus pay lower interest rates on our tremendous debt.

Finally, we must absolutely keep building the U.S. manufacturing base.  We can never expect to have a robust economy that exports good paying jobs while relying on lower paying service jobs. This issue is highly political.  This issue may not have support of the general public because we have become dependent upon low cost and often cheaply made foreign goods.  We must ban together and reject any attempt to export more manufacturing jobs.  Yes, it may cost more.  Yes, it may soften wages in the U.S. ultimately, we must face the facts that we have gone way overboard seeking cheap products at the sacrifice of our national well being.
    Bottom Line: Many of our employment problems are our own fault, and own poor attitudes about supporting small business.  On the other hand, many of our employment problems stem from letting international corporations make decisions that serve only short-term interests at the sacrifice of long-term national interests.  But, by far worse, is our political leadership sucking up to trading partners by allowing them to displace American workers all in the name of maintaining a "good relationship"!  'nuf said?

Beneath all the political verbiage there are significant, ignored facts and considerations that we need to be aware of.  And, this is what Fogcutters is all about

Fogcutters.net Finding Where Truth Hides


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Searching for solutions avoided by politicians and activists!

Unemployment has been above 9% for over 2 years.

Unemployment did once peak higher in December, 1982 at 10.8% but we recovered!

U.S. GDP per person has risen from $15,753 per person in 1961 to $41,314 in 2009 but has been declining since 2004 because the population is expanding faster than the economy.

The Great Depression of the 1930's had a rebound for about 2 years and then crashed even deeper because of government policies.  Can history repeat?


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Links regarding H1B and L1 visas -
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H1B & L1 Impacts America!

Work Permits, 10/1011

H1b Information

India gets over 50% of H1B

H1B and Green Cards, re: House hearing