Marketplace, January 14, 2004
Buried in last weeks disappointing employment report showing only 1,000jobs added to the economy in December wsa the news that American incomesgrew only 2 percent last year the smallest rise in more than a decade.
Consumers are still buying, but the buying binge cant go on much longer.Household debt continues to rise and personal savings are plummeting.Meanwhile, companies are keeping their costs down by outsourcing jobs toIndia, China, and Latin America. And theyre also installing newtechnologies that replace workers such as automated checkout systems insupermarkets and e-ticket kiosks at airports.
The reality is that unless this economy starts generating a lot of jobssoon, and at decent wages, the so-called recovery is going nowhere.Consumers just wont be able to keep on buying whats on the shelves andshowrooms.
So what is the White House doing? The administrations jobs strategyconsists of two new initiatives that are bound to make a bad situationworse. The first is gutting the nations overtime laws. Even if this were agood idea under normal circumstances (it isnt), its the last thing we needright now. Employers who have to pay extra for overtime have an incentive tohire more workers rather than pay more. Take away overtime, and you takeaway that incentive to hire.
The second is the new guest-worker initiative. Regardless of how you comeout on legalizing undocumented workers, this plan will surely mean fewerjobs for some Americans. The White house says the program will be limitedonly to jobs for which no American is available, but thats nonsense. Atleast 8 million Americans are unemployed right now. The only reason any jobremains unfilled is because the wage is too low. Require it to be filledwith an American and employers have to raise the wage. But if they can getlegal guest workers, they wont.
At least until the jobs recovery is in full swing, we should keep overtimeand maintain the limits on immigration. Oh, and one other thing: Reducebusiness tax deductions for outsourcing jobs abroad and for buying newtechnologies that replace workers. In other words, give employers moreincentives to hire.
