By John F. Di Leo -
Reflections on Labor in America, on Labor Day Weekend
The Friday that began Labor Day weekend, 2017, brought with it a disappointing jobs report. While the economy is still growing, and the stock market is booming, the most personal statistic of all – whether a person is employed or not – is the most frustrating one to watch.
We should begin the discussion by considering the flaws of these statistics. Unemployment and jobs are tricky things to measure, because a part time job isn’t the same as a full time job, one person’s home business isn’t the same as another person’s home business, and a minimum wage job that serves as the first rung of a career ladder is a world away from a job that pays the same but provides no advancement opportunities.
So – while the difference between a 300,000 new jobs month and a 156,000 jobs month is obviously huge – we should avoid getting stuck in the numbers and instead look at the big picture.
Rather than asking why aren’t more jobs being created, we should be asking why should they?
The Nature of Jobs
Let’s look at a concrete example, the one I know best: my own story. My mother had a part time job at a Chicagoland family business, a liquor distributor named Louis Glunz & Company, when I was a kid, and because of the timing of her job (9 to 6, three days a week) and the timing of my school (8 to 2:30, five days a week), her employer created a job for me, from second through sixth grades, essentially to keep Mom working for them. So I would leave school in Evanston at 230, take a city bus to the warehouse, and work from 3 to 6 those three days a week.
I was paid 60 cents an hour, to do whatever an 8 to 12 year old could help with. Emptying ashtrays, emptying wastebaskets, operating the mimeograph machine, copying information from import shipment invoices onto FDA and ATF forms, using rubber cement to affix sample wine bottle labels to import permission forms.
This was not a living wage.
But I loved it, and it taught me a skill, and it kept my Mom employed in a good part time job with friends, while my Dad worked a normal full time job downtown. It introduced me to the career of international trade in which I have remained, in various ways, my entire life. I haven’t become rich, by any means, but it’s a solid middle class career, and it began with a part time job emptying ashtrays at the age of 8. It was, for me, the first step on my personal ladder of success.
Different Jobs, Different Paths
In a nation of our size, there should be an infinite range of employment options. White collar, blue collar, grey collar. Engineering, science, sales, manufacturing, high tech and low tech, manual and mechanical. We still need seamstresses with needle and thread, and we need computer programmers working on technologies that didn’t even exist when those seamstresses were born.
Some of these jobs can operate according to a plan:
- Start as a file clerk, then join inside sales in customer service, then outside sales on the road, then rise to sales director and eventually to president.
- Or start as an apprentice designer, then rise to full time engineer, then head of engineering, plant manager, finally CEO.
- Or start on the assembly line, rise to foreman, then production manager, then open your own company.
Some such career paths are legendary, as we have seen people start with their first job as a McDonald’s cashier and risen to CEO of the company. And sometimes people bounce from one path to another as they search for the right fit, or they stop somewhere along the way when they reach the best of their ability or the limit of their ambition. And of course, depending on one’s background, one might not have to start at the bottom; the heir to a family business or a graduate with the right college degree might start out in the middle of one of these paths.
This is the system that works for the American economy in general, and it also works for each American employee in particular… as long as outside influences, such as war, natural disaster, and destructive public policy don’t interfere.
The War on Work
Conservatives and Liberals… or perhaps we should say Rightists and Leftists, or Republicans and Democrats… have very different views on this subject.
Conservatives tend to believe that almost any job is valid, depending on the situation. Conservatives hope everyone – black or white, young or old, educated or uneducated – will be ambitious, and work to the best of their ability, so that they can rise to a level of prosperity. Conservatives see the entry level job not as an end in itself, but hopefully in the start to a journey, valuable not for its salary but for its potential down the road. I, for example, couldn’t live on 60 cents an hour today… but I am overjoyed I got that 60 cents an hour, 45 years ago. It put me on the path to where I am today.
Leftists, on the other hand, live for the now, where such matters are concerned. They call for a living wage (whatever that is) for every job, and insist that any job paying less than a living wage is undesirable. They declare that some jobs are beneath your dignity, and some industries are “bad for the earth,” or “bad for society,” or “exploitative…” so they campaign for an end to such jobs.
A few examples:
The Left rightly recognized that some factories a century ago were dangerously abusing child laborers, so they passed laws banning child labor outright, instead of just requiring safe conditions. As a result, companies today fear giving kids a start, like the start I got. So my story is limited to children in their own family businesses today. Kids of family friends can’t get the same break, at least, not as early, from fear of the “child labor” label.
The Left has fallen in love with junk science, such as the concept of manmade global warming. This has led the Left to a hatred of carbon-based fuel, so they shut down coal mines, offshore oil drilling, oil pipelines, fracking… they oppose all kinds of efficient energy production, and only favor so-called “green energy” like solar and wind, which are not remotely efficient. This causes three very distinct problems: in addition to eliminating jobs by closing down so much of the oil business, the pipeline construction industry, and coal mines, virtually impoverishing whole regions that had depended upon them, this also makes our nation more dependent on foreign power sources, and greatly inflates the cost of energy, which impacts our standard of living in every other way as well.
The Left sets goals – sometimes good goals, like reducing pollution or improving gas mileage – but has no interest in the cost of meeting such goals. The regulatory impact of such mandated standards has been to diminish the sales of American cars and increase the importation of Japanese and South Korean ones… to drive both heavy and light manufacturing out of the USA toward foreign shores. The impact of EPA standards on the manufacturing sector simply cannot be overemphasized; more than any other single cause, this has driven jobs out of the USA and across the Pacific Ocean.
The Left’s love of private sector unions has destroyed the very jobs of those they claimed to support, and eventually, the lives of those who support them. For example, the outlandish demands of the UAW, for example, by joining outrageous regulations to price American cars out of reach in comparison to competitors, have cost their own members their jobs. In the same way, all over the country, manufacturers must make a daily evaluation on how many production lines to keep open here, and how many to move to foreign shores where they can afford to operate.
Equally destructive has been the Left’s more recent embrace of public sector unions. The outrageous pension programs, above-market salaries, and abundance of six-figure administrators in the public school systems of many states have so grown the tax burden that whole regions become unaffordable. Consider the experience of Wisconsin, where outlandish programs like the ‘master teacher’ program and the state teacher’s union’s own special health insurance plan were revealed to be insider scams almost indistinguishable from outright embezzlement. Only when the Republican administration of Gov. Scott Walker was able to work with the legislature to pass Act 10, the budget repair bill, could they free the state from such financial millstones.
The list of such examples is endless. Each of these families of errant public policy has cost this country millions – yes, tens of millions – of jobs. All kinds of jobs, too – from entry level to mid level to upper management. The coal mine, factory, or distribution center that closes down because of destructive government policy doesn't just kill the jobs of every employee from clerk and assembly line worker to president and CEO, it also costs the neighborhood all the hotel jobs, laundries, grocery stores and restaurants that used to serve those employees. When you shutter a mine, or drive a factory overseas, you actually kill an entire community.
In state after state, industry after industry, Democrats spent the past century restricting, banning, controlling, micromanaging, overtaxing and overpromising, to the point that they have left many of our states in irrecoverable shambles. Illinois, New Jersey and California, blessed by so many natural advantages, are bankrupt already, and many others are teetering on the brink as a result.
Where Do We Go From Here?
We have seen why jobs are down… why new business startups are discouraged, and why existing business expansions are frustrated. The micromanagement of government – at every level, frankly, but especially federal – has killed the goose that laid the golden eggs.
From 2007 through 2016, we endured a decade of absolute hell for the private sector. The recession that begin with the 2006 takeovers of the House and Senate by Nancy Pelosi and Harry Reid continued throughout the suicidal administration of Barack Obama’s two-term presidency. The past decade left us with:
- The highest effective tax burden in the industrialized world, with a 39.6% corporate and small business effective income tax rate… and that’s not even counting the state and federal burdens of FICA, Medicare, Unemployment and Workmen’s Comp, and an unbearable business insurance and liability environment for countless businesses.
- An unprecedented expansion in government aid, such as free schooling, free food and housing, even free cellphone and internet service. Nearly 50 million people are now on food stamps. How do we get people to take that first entry-level job to start them on their way to a real career, if jobless benefits pay four times as much?
- An equally-unprecedented increase in both legal and illegal immigration. An unobserved border has allowed millions of unskilled immigrants to compete with Americans at the bottom of the scale, as well as millions of skilled immigrants to take the better-paying jobs of Americans further along on their career progression. So the American teen who needs part time work while in high school and college has unfair competition… and then if he succeeds and makes it into a well-paying career as an engineer, plant manager, or product designer, he’ll again risk losing his job to an immigrant his company can bring over on an H1B visa from their foreign plant.
- The ultimate conclusion of a half century of liberal criminal justice policy has made it impossible to get proper convictions and proper sentencing for our millions of criminals, so rather than keeping villains off the streets, we waste billions on a revolving door criminal justice system that leaves our cities in the grip of a permanent crime wave. When a big city company executive sees the neighborhood collapsing around his plant – his employees fearing for their lives as they rush to their cars or wait at the bus stop, does he expand that plant, or does he look for options for moving that plant – and all its jobs – away from this urban hell… maybe far, far away?
When Donald Trump won the Presidency in 2016, the American economy breathed a collective sigh of relief. The long slow anguish of the Obama administration would not be continued under the equally destructive Hillary Clinton.
But as the pundits are saying these days, it’s not enough for Donald Trump to be “not Obama.” The nation needs Washington to undo the damage done in the recent past, and frankly, in the distant past as well.
In order for jobs to come back – and not just jobs, but the full range of jobs, the full range of opportunities that an American economy ought to provide – we need radical government reform.
- The government must cut the top effective tax rate in half or better. Now. Not fight over complex tax reform in an ambitious and unrealistic search for perfection that could take years. We need a business tax cut now. This country suffers under the highest effective business tax burden in the industrialized world. This Must End.
- The government must end obamacare and re-establish the private sector as the provider of healthcare. This too doesn’t require a complex process; just the repeal of the unconstitutional Obamacare act itself, and the empowerment of the insurance industry to do what they do best. Eliminate the bans on interstate sale of health insurance, extend the tax deduction that company-provided plans get to personally-purchased plans, eliminate the costly mandates, and allow people to choose the plans they want again. Our problem was never the system itself, but a lack of employment and a surplus of illegal aliens. Put people back to work, and the healthcare financing problem largely solves itself.
- The Trump Administration has already made strides in curtailing complex, crippling federal regulations, but they could be restored at the stroke of a pen by the next administration. This nation desperately needs to downsize its federal bureaucracy – and many of our state bureaucracies as well. This can’t be done – permanently – by presidents and governors. This requires legislative action in both the nation’s capital and in the state capitals as well.
Can jobs come back? Of course they can. If this nation does the above, we’ll see years of four and five percent economic growth, and a return to the great conservative opportunity society that our Founding Fathers intended for us.
But if we don’t… then the monthly job reports will remain tepid, storefronts and office space will remain vacant for years all over the country, and the numbers of expansions and new business startups will continue to disappoint.
You can’t expect different results until you do different things. The boot of government is still on the neck of the employer, and he just can’t be expected to hire more employees until he can breathe again.
Copyright 2017 John F. Di Leo
John F. Di Leo is a Chicagoland-based international trade and transportation expert, and licensed Customs Broker. His columns are regularly found in Illinois Review. Permission is hereby granted to forward freely, provided it is uncut and the IR URL and byline are included.
I go with John William’s shadowstats, not the gubbermints doctored numbers.
That’s fine, Term Limits… you’re welcome to..
but it doesn’t affect my thesis.
Obamacare is another job killer. Pre-Obamacare my health insurance was under $14,000 a year. This year my health insurance is $28,000 a year. I ran into another person this week in the same situation where pre-Obamacare he paid $9,000 and now $24,000.
In Illinois the insurance companies are asking for up to a 43% increase in premiums for the individual insurance policies. At the current rate of increase I will be paying over $100,000 within 4 years. My ability to be self employed is being destroyed by the lefts control of the insurance market.
It isn’t just those of us who buy our insurance on the individual market place who are loosing our jobs but the health providers as well. Edwards hospital recently announced laying off 300 employees and cutting 50,000,000 from their budget because of the increase in people who come in with insurance but end up not being able to pay because of the high deductibles.
Well it does John. While you continuously grind away at the Democrat-Republican, left-right paradigm the
deep state continues to run off with the whole show.
Well, Trump said that he would be the “greatest job producer that God ever created,” and Republicans are in power. Time to put up or shut up.