Ask Me Help Desk - Getting our jobs back from overseas

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Originally Posted by Galveston1

Someone needs to come up with a way to bring back some of our jobs from overseas.

Which jobs?

As far as I can tell, we have seen a significant rise in the number of jobs over the past 5 years, as our economy has grown. From December 2003 to December 2007, the number of employed in the USA has increased by 7.8 million. (Information per the Bureau of Labor Statistics.)

And we are not just talking about low-wage jobs either. According to the BLS, the average wage in the USA has gone up over the past 5 years from $742 per week to $831 per week. That's a 12% increase. Women alone showed a similar 12% increase in wages over the same period. For every ethnic group, there has been an increase as well, (Whites, 12.6%; Blacks, 13.6%; Asians, 21.7%; Hispanics, 13%).

In terms of occupation, we have seen increases at every level. Management professionals saw a 14.5% increase; service occupations, 11.3%; sales and office occupations, 10.7%; Natural resources, construction, and maintenance occupations, 9.8%; Production, transportation, and material moving, 10.8%.

So if there are more people who are employed, and if average salaries are increasing, and if unemployment is low, then exactly which jobs are being sent overseas?

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We have all heard that the U.S. worker needs to become more competitive (i.e. work for less pay) What about the idea that the U.S. Government become more competitive in the world market place? How should taxes be structured to attract manufactures to this country? By having the highest corporate taxes in the world, are we not forcing manufacturing off-shore?

While I have many problems with the IRS and our government taxing us in the first place, we do not by any stretch of the imagination have the highest taxes in the world. Our highest tax bracket at present is 33%. But places like France, Sweden, Switzerland, Norway, Denmark, and even Canada have tax rates approaching or breaking 50% of income.

Nevertheless, you are correct in your assessment... high taxes drive business away. High taxes also cause unemployment. Neither of these things are good for the economy as a whole.

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If corporate taxes were reduced, wouldn't that mean more and better paying jobs, resulting in a net gain for the treasury? Maybe some thoughts from this discussion will get to the candidates and we can find out who really wants what is best for us.

Good point. Lowering taxes has always created new jobs. People with more disposable income buy more "stuff". This leads to increased production of "stuff". The increased production of "stuff" means that more people are needed to make "stuff". This leads to increased employment, which means that more people have more disposable income with which to buy more "stuff"... and the cycle continues.

That said, there is an equally important component of government that is sometimes overlooked. Just as expensive as taxation to a business is the cost of complying with unnecessary government regulations. The cost (both in time and money) of complying with government regulations in every business is ridiculous... so much so that a whole new industry has sprung up. There are now service companies who's sole job it is to help other companies comply with government regulations. And the cost of doing so is ridiculous.

So if the government were to lower its regulatoy requirements to ones that make sense, and lower the costs of doing business, wouldn't that create more business in the USA, more jobs, more profitability, etc. It certainly seems so. And after all, regulatory compliance is really just a form of indirect taxation.

Elliot

Well, Elliot, the figures you give all look good. As the basic idea, there doesn't seem to be a lot of disagreement (so far!). There is something that I would like to bring up, though. All my working life, I was able to support my family without having to depend on my wife. I made the living, and she made the living worth while, and we reared 5 children. Now, it seems that it is almost impossible for one wage-earner to support a family. I speak of hourly employees. I will accept the report that new jobs are being created, but evidently not many in manufacturing. For example, Wal Mart should be called the local Chinese Outlet. You hardly find anything from anywhere else. Manufacturing has been the backbone of our country for a long time. Somehow, someone has to take raw materials and produce something of value. We can't rely totally on service industries, because sooner or later that will rise up and bite us. I read not long ago that there is only one manufacturer of electronic components in this country. Can you imagine our military having to get its electronics from China, India, or Taiwan? There would be no secrets there for sure! But my first point is how to get Washington to realize that it must COMPETE. A truly alien idea in D.C. I think.

Good points, Galveston. Manufacture has indeed been hit hard, I won't deny that. But much of the reason that manufacture has been hit so hard, and that so many employees of manufacturing companies have been laid off is because the cost of operations are so high because of the regulatory costs and taxes. It's not that our companies can't make good products, it's that they can't afford to. If they spend the extra money to make a better product, they are risking losing money. So they make a shoddier product because it's cheaper. They use fewer employees because its cheaper. They outsource as much as possible because its cheaper. And THEN they can be profitable, if they are lucky.

So the idea is to make it cheaper for them to do business. That means less unnecessary regulation and less taxation. Then they can make a better product and still be profitable... and can compete in the world market.

Yes, it is an alien idea in much of Washington. It is most CERTAINLY an alien idea to the Democrats, who believe in more regulation, higher taxes, and bigger government.

Elliot