Are Americans Entitled to Extended Unemployment?

Tea Partiers are ignited about the idea of abolishing long ago formed agencies that have been cemented in stone buildings along Constitution Avenue. They believe that good government concepts never really die and eventually become entitlements that stymie original intent.  However, once formed, these ideas take hold in the American consciousness and we begin to believe we are entitled to them as unalienable rights.

Take unemployment insurance for example. Like defense, education, and the rule of law, unemployment compensation has its roots in increasing the efficiency of capitalism.  With a temporary stipend, unemployed workers are free to move from businesses that are sliding past their plateau of usefulness to those that are innovating.  Without the fear of losing their homes and other assets, employees move to healthy businesses even during economic downturns.  Because this idea supported the beliefs of both parties of congress, unemployment insurance passed by an overwhelming majority in 1935 as part of the Social Security Act.

In most downturns, the unemployed are able to find jobs within the insured period of 26 weeks. However, an underlying sickness gutted our sustainable job base during the last thirty years as we borrowed our way through successive economic bubbles.  Only after the credit default swap bubble collapsed our economy did we understand that our jobs were gone.  Not only had our manufacturing blue collar jobs been shipped overseas, but our technically skilled jobs were exported as well. Our average period of unemployment has now swelled to 37 weeks.

It was only natural that Congress quickly adjusted the unemployment period as a stop gap measure when faced with the Great Recession.  They rightly protected our longer term unemployed to keep them from losing all they have gained in contributing to our country.  Now that the ranks of the 99ers, those that have fallen past the safety net of extended unemployment, are swelling, America is debating if unemployment benefits should extend further, and whether the unemployed are entitled to a longer benefit period.  

The debate on entitlements needs a paradigm shift.  Instead of discussing whether unemployed should receive more than two years unemployment compensation, we should be creating a process that allows our citizens to quickly re-enter the workforce and once again contribute to America’s success.  

My voucher plan is a paradigm shift.  Instead of paying unemployed to sit on the sidelines of our economy, America instead invests in our future by getting our people back to work.  Small businesses can hire voucher employees at their unemployment rate. In return, Voucher employees can work twenty five hours per week and receive the same pay they would have received through unemployment. The Federal Government can then reimburse employers the employees’ wages without increasing the unemployment budget.

Tea Party members will be concerned that this voucher plan will become yet another entitlement. They can rest assured that the voucher plan will be a relic of the Great Recession, created to automatically expire as the economy improves. Voucher dollars will decrease as the percent of unemployment decreases, requiring employers to cover more of voucher employees’ wages.  As a result, voucher employees in barely sustainable businesses will transfer to healthier ones.

Some claim that the unemployed feel entitled to remain unemployed, collecting extended payments.  While we can all find a few examples of misuse of American altruism, I have found that most people want meaningful employment.  The entitlement argument stems from the disincentive our unemployment system creates for rejoining the workforce.  It’s not unreasonable to compare available jobs with current unemployment payments. When a worker leaves a job that paid $14 per hour, is getting $8 per hour for unemployment, and is faced with a job that pays $9 per hour, their incentive to work is only $1 per hour; substantially less than their former job and only a dollar more than unemployment. Unemployment should not create a re-employment inertia differential.  My job voucher plan creates the largest re-employment incentive because unemployment extension payments end.

Americans might be concerned that my voucher plan would be used to balloon what they believe is already too large a government providing too many entitlements.  They cite previous government programs that raised social benefit costs without creating profit generating, taxable products or services. My job voucher plan, however, grows jobs only in private sector small businesses, and can be supported by existing government agencies without expanding their budgets. 

Others claim that my voucher plan is just an entitlement to small business, creating an inefficient makeshift set of jobs for the unemployed.  While I agree that my plan can rapidly employ all Americans, and as such may create some early, inefficient placement of workers, it nonetheless will also create a micro-venture capitalist function for millions of small businesses.  Some of these ventures will successfully create taxable revenue, and some will be incredibly successful, paying back America’s investment through future taxes on corporate profits and employee compensation.

Finally, concerns have been raised that any program such as this may create an entitlement mindset that all Americans must work.  Government work programs have been abused by some to collect compensation while performing work at subpar levels.  This problem is self correcting in my voucher plan.  Employees would still be governed by private sector principles.  If the job is not a good fit, employees will not find safe harbor in this program. For the program to be successful, government intervention will have to be restricted to current EEO and ADA requirements.  But, in the end, one entitlement should fly true.  America will find it is entitled to renew its future.

Can the Job Voucher Plan Create Renewal in America?

A sense of purpose is as important to one’s work fulfillment as the financial reward that work provides our family.  I am reminded of the story where a passerby asks a stone mason who is chipping away at a cornerstone what he is doing, and the mason replies not that I am cutting a block, but that I am creating a cathedral.  Here in Florida, I am surrounded by neighbors who have lived in their homes for 30 years only to turn them over to the bank because of hard times.  Their share of the “cathedrals” they created for our country was stored in their home. When the banks foreclosed on them, they lost the results of their life’s work. 

Losing their home is just one step down the painful road that millions of Americans are enduring during this Great Recession.  With the loss of so many millions of jobs, the difficulties of just one jobseeker can get lost in all the noise.  How do jobseekers cope when they have become part of the 99ers, those whose extended unemployment has run out?

During this Great Recession, as each month passes, the job seeker begins to realize that somehow this recession is different. In the first days after he recovers from the shock of losing his job, he determines to quickly pursue businesses which best meet his career and geography requirements. As the months go by, he realizes that opportunities are diminishing, and he must now lower expectations if he is to cover expenses and keep the kids in the same schools.  As unemployment compensation comes closer to the end, he recognizes he may have to move to open up more job possibilities. He reluctantly lists his home only to find over time that it is competing in a surplus market, and that its value is lower than the mortgage.

Yet he persists, getting up each day to comb opportunities till dusk with a hopeful heart of scheduling a job interview. His efforts pay meagerly because interviews are not plentiful in this stagnated market. Each month, more people transition to the unemployed, and they are being called in before him. He has similar qualifications, but somehow because he has been out longer, employers begin questioning why he has not been hired. Sensing their skepticism on the phone, he shows a lack of self confidence in the few interviews he gets, further lessening his chances for hire. His wife and kids quietly grow anxious with him, and he fears they are wondering what his “failure” will mean to their lives, their friendships, and their futures.

At some point, any job would be better than grieving through this spiraling loss of self worth. Then one surprisingly sunny spring 2011 morning, he turns on the TV to see President Obama, surrounded by leaders of both parties on the White House lawn, announcing the “Job Voucher Plan”. As promised, within weeks, the internet and local papers begin filling with job offers in all areas of employment. His spring is renewed with hope.

After several interviews, he begins working again, and not in some makeshift job, but one with career potential and purpose. The owner of a small business has painted a picture of an innovation in need of an American with the skills to make his dream a reality. Now purpose driven, he sets about to create real value for his employer and his community.

He knows that small business ventures are not always successful and that there are no guarantees this job will turn into something permanent. But the American people have committed for the next two years to give him 25 hours a week to help his employer and product to success.  Each morning seems brighter as he gains control through his efforts to build a career in this new small business venture. Not only is his family experiencing this change; he sees a purpose growing in the entire community. There is a belief that we are all working for something larger, for a renewal in America.

While this spot is not where he had hoped he would be in the years leading up to the Great Recession, he now has a sense that things will get better. He is being paid the same wages as before the recession but with fewer hours. He will help this company with hope and loyalty of purpose, and will have done his part to dig America out of its slump. As the economy improves and competition for employees heats up, his small business owner will compete to keep his new, valuable employee. Nonetheless, the job seeker will diligently use his 15 extra hours a week to once again pursue the American dream.

The above chart shows unemployed broken down by time of unemployment.  It does show a slowdown in newly unemployed.  However, it does not accurately depict all unemployed because many have fallen off the curve and are no longer counted.  Unfortunately, it does show that the mean time of staying unemployed is growing.

Bruce Nussbaum’s Blog on HBR

 

Bruce Nussbaum recently posted this blog on Havard Business Review.  His message was spot on.  He heralded the issue with trumpets. Multinationals are not just transferring jobs overseas through direct foreign investments.  To gain access to China’s markets, they must couple DFI with technology transfer.    Here is my short editorial.  Our great American hope for competition, American innovation is being sold to the highest foreign bidder.  The way to compete with this innovation drain is to reseed innovation here in the fertile ground of small domestic American businesses.   Now Bruce’s great article:

What’s Wrong With America’s Innovation Policies

10:12 AM Wednesday January 26, 2011
by Bruce Nussbaum  

President Obama gave a stirring speech last night, saying “We need to out-innovate, out-educate, and out-build the rest of the world.” He used the word “innovate” more times in his State of the Union than any other U.S. president. To those of us who believe the future of the country depends on its innovative capabilities, this was hugely positive. But the obstacles to boosting innovation in the US are far higher than the President acknowledged. Indeed, as CEOs gather at the World Econimic Forum in Davos, they are much greater than most business leaders are willing to say.

Here are some harsh truths that President Obama did not face in his State of the Union speech: there is very little actual innovation taking place within Big Business; Washington innovation policy is placing big bets in the wrong places; China’s innovation policy is superior to America’s.

Let me explain. A devastating National Science Foundation Business R&D and Innovation Survey that generated almost no media discussion when it was released in the fall showed that only 9% of the 1.5 million for-profit public and private companies in the U.S. had any product, service or process innovation between 2006 and 2008. Of manufacturing firms, 22% innovated. In non-manufacturing, a mere 8% innovated. As economist Michael Mandel has observed, “you can’t be an innovation economy if only 9% of your companies are innovating.”

Under both Democratic and Republican administrations, for nearly 20 years, Washington has been placing the wrong bet on R&D. Hundreds of billions in government funding has gone into bio-sciences without any significant return. Genonomics was heralded as the Next Big Thing after silicon, the driver of future economic growth. It isn’t producing results in terms of new companies, jobs, or economic growth in general, yet billions more flow into NIH and universities every year.

China’s brilliant “Fast Follower” innovation policy is generating the biggest transfer of technology in history. A combination of state-driven policies is driving this policy — requiring Western companies to partner with Chinese firms to do business; demanding transfer of the latest technologies in exchange for access to markets; favoring “indigenous innovation” in government purchasing; fencing off green and other industries from foreign competition; offering low-interest state-bank loans to local champions. This industrial policy is at odds with WTO standards, but is a boon to Chinese economic growth and a long-term threat to U.S. global competitiveness.

A realistic American innovation policy will need to take these three harsh truths into account. We need a much more skilled business leadership than we have currently, capable of creating as well as managing. We need to refocus government investment into manufacturing, energy, and materials. And we need much more vigorous global economic policy that meets the challenge of China’s innovation policies.

When President Obama speaks of a “Sputnik moment,” he clearly understands the need for innovation. The next step is crafting policies that deal with the harsh truths of American innovation and move us forward.

Bruce Nussbaum is a member of the Council on Foreign Relations. A former assistant managing editor for Business Week, he is professor of Innovation and Design at Parsons The New School for Design.

Job Voucher Plan Can Counteract Government Support of Foreign Job Transfers

In my Fish Story blog, the village elders, being too old to fish, nonetheless were given special privileges by the entire village by virtue of their age and experience.  America’s “elders” instead must rely on our “village nobles” to anoint them with voting privileges.  In American elections, 94% of the time, elected officials with the largest campaign war chests win their elections.  Over 90% of campaign funding comes from a combination of the 2% of our wealthiest individuals, 1% of our largest corporations (mainly multinational corporations-MNCs), and international investment bankers.  Recognizing these sobering statistics, our politicians must first satisfy this very small minority if they are to stay in power long enough to propose legislation of their conscience.

To satisfy this elite consortium of America’s campaign donators, our legislators must support free trade, unfettered by taxation, and protected by a worldwide military presence.   Free trade allows wealthy investors, MNC’s and bankers to share the profits of direct foreign investments (DFI) in other countries.  However, in order for profits to accrue, low price goods from those countries must have free access to the American consumer, the world’s largest market. 

With access to American markets, wealthy individuals earn high returns on their investments in emerging countries’ industries, investments protected by 1,000 U.S. military bases keeping a watchful eye on the sovereign boundaries of our trading partners.  Investment banks earn their share of future profits by funneling funds from wealthy individuals to MNCs.  And MNCs profit from increased access to exponentially growing foreign consumer markets.  They also profit from selling lower priced goods and services to American consumers. 

MNCs can offer lower prices to Americans because they have lower costs.  They achieve lower costs by leveraging cross border assets.  American parent companies transfer trade secrets, innovation, and core skills across national borders to foreign subsidiaries.  Then, after providing low cost labor, subsidiaries return low cost finished goods to American consumers.  In addition, through transfer payments, MNCs transfer revenues and costs artificially across borders to reduce tax payments.  Costs are assigned to American parent companies to reduce profits, and revenues are transferred to increase subsidiary profits in countries that have low or no taxes.  Our legislators, while publicly decrying these practices, tacitly support them.

We are witnessing a flight of American wealth and jobs to emerging economies and America’s policy for managing the threat seems inadequate.  The difficulty in crafting an optimum policy is that some MNCs actually have net benefits for America while others do not.  As an example, as American MNCs grow large foreign markets, they hire additional, high paying, American parent company jobs to support foreign subsidiaries, jobs that would not exist without expansion into other countries.  MNCs hire a disproportionate 19 percent of Americans and those jobs on average pay 20% more than domestic company jobs.

Americans argue that we are losing manufacturing jobs to low cost countries.  True, but some of these jobs would be lost whether or not American MNCs invested in emerging countries.  If our MNCs did not invest in these countries, other countries’ MNCs,  that make up 88% of the total number of MNCs, would invest in our stead, still taking our jobs, without any of the benefits that would accrue our American MNCs.  Nonetheless, the cost of jobs lost to foreign investments, including social burden costs such as unemployment compensation, more than offset the benefits of lower costs to American consumers.

America can slow the pace of job losses by investing in increased productivity of American businesses.  But to reverse the job loss trend, we must accelerate innovation to create new high paying jobs. My job voucher plan counteracts our MNC dilemma by employing those that have lost jobs to overseas multinationals, directly into small, non-multinational businesses, expecting that these businesses will use the abilities of our citizens to spur innovation and productivity.  

It also helps small businesses compete for capital that was cut off in this recession.  While large, multi-national corporations have continued to have easy access to low interest capital, small businesses have been cut off from capital and credit. It also provides intellectual capital to small, non-multinational companies that historically have provided hiring out of recessions and that are breeding grounds for innovation; that critical factor that must be spurred to counteract the transfer of jobs overseas is paid for without increasing the federal budget.

Can Job Voucher Plan Overcome Government Waste, Fraud, and Abuse?

In all the discussions which I am proposing my voucher plan, the issue of unscrupulous business owners gaming the system by replacing current full time employees with short term, part time voucher employees is the most prevalent concern. In any government program, there is always waste, fraud, and abuse, and you are right to be skeptical.

Safeguards must be put in place to guard against the few unscrupulous employers that would game the system. A simple fix is to allow only businesses that are growing to employ voucher employees, and to dictate that any company that lays off a full time employee must first let go all voucher employees. Certainly, the voucher plan introduces opportunity for waste, but what could be more wasteful to the economy than paying valuable workers to sit on the sidelines of the economy.

As a small business owner that has hired and fired hundreds of employees, I can speak with authority on the issue of replacing full time employees with part time voucher employees. Anyone who has managed a small business knows how hard it is to find, train, and keep an employee that fits the business. Full time employees are the backbone of a small business, and no prudent employer would let go such a valuable employee that has taken years to develop and replace them with short term, part time employees.

Some mention that there are better ways to stimulate the economy than my voucher plan. I am hopeful that they are correct. I am concerned that the government has very few economic bullets left to try. Interest rates are effectively negative. Quantitative easing may help temporarily but in the process may destabilize financial markets and corrupt our position as the reserve currency of the world. Bank infusions haven’t eased credit or access to capital. Consumer spending won’t be coaxed given excessive consumer debt. Stimulus has some merit when focused on future competitive infrastructure like energy independence but is limited.

My voucher plan has a specific three part focus that is paid for without increasing the federal budget. It uses dollars already allocated for the unemployed to employ all through the free market. It circumvents bank illiquidity giving “capital” to small businesses that have been cut off from capital and credit in this recession but have traditionally provided the hiring out of recessions. It provides intellectual capital to small, non-multinational companies that historically have been the breeding grounds for innovation; that critical factor that must be spurred to counteract the transfer of jobs overseas. It is an idea that merits a serious review.

Job Voucher Plan Helps Reduce Bureaucracy

I share most Americans’ concerns that creating bigger bureaucracies to help fix our debt problems is a cure that kills the patient.  A benefit of my job voucher program, (www.jobvoucherplan.com) is that it allows the government to support a program for all Americans to begin working without creating a new bureaucracy.  

The voucher program will be no more difficult to administer than the current unemployment program; in fact much easier. It can be administered by the same state workers that currently administer the unemployment program.  It will actually reduce their workload.  With many less unemployed persons requiring verification of evidence of job seeking, the program will reduce pressures to balloon the bureaucracy further to deal with our much larger unemployed population and the inherent social problems that are being manifested by the long term unemployed.

The job voucher plan simply passes payments that would have gone directly to unemployed persons through businesses, expecting that businesses will use the abilities of our citizens then to spur innovation and productiity.

We Can Regain Jobs That Left With The Multinationals

Early on, our nation made the strategic decision to outpace all others in military superiority. With a military budget that now exceeds all other nations combined, America declared and exercised our right to quickly defend the sovereignty of our allies from over 1,000 U.S. bases that extend our dominance throughout the world. We pursued our goal with such steadfastness that we are now the sole super power on earth. Our military influence has created a worldwide economic bastion that has allowed all nations to far surpass the economic output that could have been produced had not such a peaceful expectation existed.

While this exertion of power created great peacetime dividends for this country, it also created unexpected results, the birth of multinational corporations, or “borderless nations”. Our strategy of military dominance created a much safer, stable world that lessoned the risk of U.S. based companies investing abroad. With risks lessened, businesses could more easily justify moving traditional industries overseas. Unprecedented peace allowed multinational corporations to gut factory towns like Detroit, Youngstown, and Pittsburgh.

While our manufacturing strength was slowly eroded from our shores, our citizenry was lulled into the belief that our future was sound by the successively reassuring waves of the savings and loan bubble, the stock market bubble, the internet bubble, and finally, the Wall Street derivatives bubble. By the time the suds cleared, our nation was left without a significant means of traditional production. While we were being seduced into the belief that our country was financially sound, many of the trade secrets, core skills and financial wealth of corporations had been shifted to other countries.

Meanwhile, our citizens believed that the bubble value of our homes and stock market portfolios would support our needs to consume. Instead, when the bubbles finally stopped popping, we found that our consumer debt was of historic proportions and that our federal, state, and local governments had ballooned to consume bubble inflated tax revenues and were awash in deficits. We now have the unenviable position of being the greatest debtor nation that has ever existed.

While it will be painful for all to reverse this trend that threatens to quickly topple America from its century of hegemony, acting decisively with the right prescriptive tools, we can decide that our nation will not endure a decade of languishing high unemployment. However, if we are to escape the fate of our grandparents, government must partner with American business to create historic advances in innovation and productivity.

A partnered solution that can accelerate our country toward full employment is my voucher plan. It replaces extended unemployment payments with hiring vouchers. Small businesses can hire voucher employees at their unemployment rate. In return, voucher employees can work twenty five hours per week and receive the same pay they would have received through unemployment. The federal government can then reimburse employers the employees’ wages without increasing the federal unemployment budget.

A few benefits include: Employees learn new skills and can continue to seek full employment. Employers lower risks of hiring new employees, spur innovation, and reduce prices of goods and services to compete in the global market. Government supports job growth through direct infusion of dollars into small businesses, and lets the free market determine how to maximize resources.

This idea can employ all Americans now, and can move many from the sidelines of our economy onto the field of American ingenuity and global competitiveness. I ask your readers to share with their representatives thoughts about this voucher plan in hopes that a leader might champion its concept now when we need it most.

 http://www.youtube.com/watch?v=8yUhBBxHGTU

WWW.Usairambulance.net

Contain Innovation and Core Skills within America’s Borders Through Full Employment Plan

Like other empires that came before, for its first two hundred years, America increased its wealth by exploiting its natural resources through the increasing innovation of its people. Some of our nation’s innovation was diverted to our military to outpace other nations, protecting our wealth. By exporting our military might around the world, America created a stable trading environment for global businesses, adding to the wealth of all our trading partners.

Until the last quarter century, America accumulated wealth, having trade surpluses. Our government supported free trade with the belief that all countries, including the United States, benefited by a greater abundance of goods. However, during the 1980’s, America’s innovative advances did not keep us from trade imbalances, and we began our path from the greatest creditor nation to the greatest debtor nation on earth.

During this time, many of America’s businesses took advantage of the economic stability supported by our empire’s military, and grew as multinational corporations with allegiances to international shareholders. With the rise of multinational corporations, innovative advantages once contained within America’s borders were increasingly transferred to other countries. America’s trade secrets, core skills, and corporate wealth became fungible international commodities.

Even though free trade continues to be touted as a benefit to American consumers, it is becoming increasingly unclear if free trade is a net benefit to the average American. Even so, trying to slow the regression of American wages by erecting trade barriers is ultimately futile. America’s competitive edge now rests with increasing the productivity of its workforce, with continuing our role as the world economic military stabilizer, and with supporting domestically grown and maintained business innovation.

Critical American success factors for our government include 1. Dramatically improving the success rates of our schools, 2. Slowing the growth of our money supply to sustain our position as the reserve currency of the world, thus allowing us to continue to quasi-tax foreign governments holding our dollars to pay for the economic benefit of our military, 3. Significantly increasing support for small businesses, the engines of American domestic business innovation, and 4. Providing for full employment of all able-bodied Americans.

A solution for unemployment:

Government can take bold steps now to partner with American domestic businesses to create historic advances in innovation and productivity. A partnered solution can replace extended unemployment payments with a hiring voucher plan. Domestic businesses can hire voucher employees at their unemployment rate. In return, Voucher employees can work twenty five hours per week and receive the same pay they would have received through unemployment. The Federal Government can then reimburse employers the employees’ wages without increasing the unemployment budget.

A few benefits include: Employees learn new skills and can continue to seek full employment. Employers lower risks of hiring new employees, spur innovation, and reduce prices of goods and services to compete in the global market. Government supports job growth through direct infusion of dollars into domestic businesses, and lets the free market determine how to maximize resources.

This idea can employ all Americans now, and can move many from the sidelines of our economy onto the field of American ingenuity and global competitiveness. I ask you to share with your representatives thoughts about this voucher plan in hopes that a leader might champion its concept now when we need it most.

http://www.youtube.com/watch?v=8yUhBBxHGTU

usairambulance.net