The problem of unemployment is not equally distributed, the lesser educated, the manual workers are more adversely affected. Now two members of Congress see part of the problem as employers discriminating against the unemployed and are introducing a new law to make that illegal. Some policy makers want to provide incentives to hire new workers, but to do what?
I don’t have a magic solution, but I do know there must be a demand for goods and services before employers will hire people to provide those services and manufacture those goods. This tough economic period should also serve as a wake up call for Americans that the economy has permanently changed and that if you are thinking about dropping out of school or forgoing training in a field for the future, you better think again.
To solve this problem, which is no easy task, requires finding a way for the 90% of Americans with jobs to make purchases during a time when they are worried about their own debt and saving. Everything we have tried so far has not worked. We have provided incentives to buy cars and homes, we threw money at people, we lowered payroll taxes, we spent hundreds of billions to stimulate construction and other projects, we subsidized green industry, we saved the auto industry, we even abandoned the space shuttle and now pay Russia $20 million to send each of our astronauts to the space station (not exactly relevant but interesting nevertheless). So what’s next, more of the same?
The average person is caught in a bind. They are being asked to fully fund their retirement and pay more and more for health care while wages barely rise and they are being asked to stimulate the economy by spending. Figure out how to mitigate one side of that equation and perhaps we will have found a real solution.
The left says more government action, the right says less … whatever the answer may be, we should all hope we get it right.
If we have learned one thing from all this, it is that economists are no more helpful than alchemists.