Why is unemployment still at 8% plus? For months and months now private sector jobs have been increasing steadily although not as rapidly as they fell off when the bust happened beginning back in 2007. The answer? Government employment. All levels from city to federal and the US Postal Service declined as the country attempts to embrace a concept of smaller government to reduce debt. The mantra of reduce spending exclusively rather than one that combines reduced spending with increased income costs government employment and keeps the unemployment figure higher by up to 1%.
That seems to fly in the face of another political philosophy of the day “Government doesn’t create jobs, business does”. If government is losing jobs, then it must have created them, right?Actually, neither the government nor the private sector “creates” jobs. Yes, they provide employment, but they don’t normally create jobs. Consumers create jobs and determine what types of jobs are created. If we all suddenly became vegetarians, there would be no jobs in the meat packing and processing industries no matter how much the wealthy wanted to invest there. If we all quit driving cars, there wouldn’t be a need for as many jobs in the automotive and gasoline industries. When we save rather than consume, we affect every industry. If we want to create jobs in this country we need to consume those products and services that by necessity are supplied by this country.
Some, like road construction and education, are provided by government employment. Some, like retail sales and home building, are provided by the private sector employment. I recently read an article concerning the lack of skilled workers to fill all the open positions available in a variety of industries. Near the end of the article a businessman running a small company reported five positions open for many, many months. He interviewed lots of applicants, found none worth hiring, and lamented the fact that skilled applicants were not forthcoming. Then he had an “aha” moment. He raised the salary from $25,000 to $45,000 annually. He attracted a totally different type of applicant, filled the positions within a week, increased his sales and personal income, and looked at another staff increase. The less we offer, the less we get.
Think about that when you vote to reduce government spending in salary and benefits at the expense of those employed by government.
Think also about how many “consumers” of the products and services your job produces are lost when you vote to eliminate government employment.
Let’s face the reality. We, consumers, are the cause of the current economic crisis.
Yes, the bankers, realtors, and Wall Street mavens led us on.
Still it was our gullibility in believing all that optimism and our over-spending on everything imaginable that got us in trouble. We started relying on two incomes rather than one. We expected wealthy industrialists to share with good paying jobs and we cut their taxes so they could do so. Then the world changed as a global economy started to take control and investors cried out for bigger profits to raise stock values.
The value of the individual working person declined. The value of corporate loyalty declined. The value of unionization declined. “Divide and conquer” became the corporate watchword.
Eventually the bubble needed to burst and we, the consumer, stopped consuming. It is our income, the income of the average consumer, that is the key to recovery. The richest 1% or even the 5% cannot consume enough to set things rolling.
They can, however, decide to revalue our work whenever they choose, shift the currently high-end weighted income stream, and increase dramatically the consumer pool. Yet they sit on their trillions.
What more do they need to satisfy their inner longings?