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Does America have an unemployment crisis? If so, then how would you solve the unemployment crisis?

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    Aug 17 2012: Yes, America does have an unemployment crisis. I do believe that there have been structural shifts to the economy to create more work for fewer people. However, people find jobs every day. There are plenty of jobs out there to be had. The problem is that people are in a scarcity mindset and are looking for jobs in all the wrong ways.

    There is a really good article in the NYTimes today about people who are long term unemployed in California. First, my heart goes out to these people. It must be emotionally difficult to be unemployed for such long periods of time.

    When people who are often unemployed long term tell their stories, they often say that they are sending out hundreds (sometimes thousands) of applications. I always think, "well that's the problem".

    They're often using 20th century methods to search for a 21st century job. The simple reality is that the vast majority of people find jobs through their networks. If you're applying for jobs in the newspaper, on Craigslist, or on Monster.com, you may as well buy a lotto ticket. You have about the same chance of hitting the Powerball as you do of landing a job.

    "What Color Is Your Parachute" by Richard Bolles does an excellent job of breaking down the 21st century job search process. Mr. Bolles basically says the same thing - you find jobs through your network and looking on the internet or in newspapers is a waste of time. By time a job is posted on the internet, there are hundreds if not thousands of people applying for the open job. You don't have a chance.

    The best time to build a network is when you really don't need anything. While you're working, you should be on Linked In, connecting with people on the regular in your profession, and keeping your ears to the ground. When you are laid off, put out the call to your network and get moving.

    Whatever you do, don't waste time applying for work on the internet. It feels proactive, but it is really a passive job search approach. Get out there and network!
  • Aug 20 2012: Regarding highly educated people being unemployed:

    Some educated occupations go through boom and bust cycles. Nursing is an excellent example. When wages go up too many people start school to become a nurse. When these people graduate then there are too many nurses, so some cannot find employment, and wages decline. When wages stay low for a while very few people start school to become a nurse, and after a few years there are too few nurses and wages start rising. This cycle occurs with some engineering fields also.

    In economics class they teach that wages will go up or down so that the supply will meet demand and all of the available nurses will find employment, even if the wages are not what they hoped. In the real world this balancing act takes considerable time, and meanwhile people are making decisions about school and career. Unions are also a factor. When the wages for nurses go too low some of those nurses look for other work and other careers, reducing the supply of nurses. When it takes years to learn the skills needed for an occupation, this delay can cause wages to go very high and that in turn results in too many people trying to enter that occupation.

    This situation could be improved by making better information available to people who are considering entering into the field. Unfortunately many of these people try to get this information from the schools, who have a big incentive to get these people to enter their school.

    The situation could also be improved by educating young people about economics.

    Many people say that a major part of the answer to the unemployment problem is education, and they are correct in a very general, overview sense. But for an individual, it is important to get the skills that WILL be needed and WILL pay a good wage at the time of graduation. Unfortunately, no one is very good at predicting which skills will be in demand four or five years in the future.
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    Aug 18 2012: There is some chatter about what it takes to create jobs. Once again there is only ONE THING that creates jobs. That is capital investment period. When government creates uncertainty, capital investment goes elsewhere period.
    Any chatter that points to other causes is not true.
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      Aug 19 2012: Hi pat,

      Okay, capital is the only solution, then what would you do with the capital for creating new jobs?

      I believe the other chatter leading elsewhere is actually related somehow because we need capital to make anything work and just capital sitting in a nicely tailored room won't do anything if no one thinks up an idea to use it properly.
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        Aug 19 2012: Since it is not our capital we aren't going to do anything with it. It is other peoples money. Would be ok if someone swoops into your bank account and decides what to do with your money?

        State compete to attract business to their state. That is how you get investment and jobs. The state of Texas has done a good of this and over the past several years have created more new jobs than all of the other states combined.
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          Aug 19 2012: Okay, I understand. I wanted to say how does the government allocate funds to improve job creation, such as the methods of Texas, to all the states, besides good ol'competition?
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        Aug 19 2012: It doesn't take the money in the first place. It doesn't allocate anything.

        Do you know how best to allocate your funds or do you need the government to do it for you?

        The way Texas did it was by not taking the money in the first place through taxes, regulations, licenses, etc.

        I get it you and your ilk want to help people. The problem is that you think you know what is best for the other fellow. YOU AND YOUR ILK DO NOT. Not to mention the fact that it is incredibly arrogant to think such a notion. You clearly don't know the first thing about economics yet you want to tell other people how to spend their money. There are some VERY smart people on this forum yet you see fit to ignore what they say.

        You have not learned the first barrier of learning which is knowing that you don't know.
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          Aug 19 2012: I'll agree I'm no expert. I don't think I'm being arrogant, but I am definitely trying to learn, though I learn at a slower rate than most people, so thanks for not acting arrogant. So thanks for your patience, I suppose. Nice chatting with you, as usual.
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        Aug 20 2012: Spare me the little bo peep routing I'm not buying it.
  • Aug 18 2012: The big problem stems from job creation but the hinderances are imported products. There should be a balance with regards to imports because it clearly has an effect on local manufacturers and therefore a price battle which leads unemployment.

    I'm not sure if the US have an unemployment crisis but watching reality shows like secret millionaire, and the like seems to show that large groups have major unemployment issues. There are ghost towns in a number of states. Sadly due to industry issues.

    Education is not the issue as we can see.
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      Aug 18 2012: There is an argument I've heard that there are too many educated people and that is, supposedly one of the problems....it somewhat makes sense....but I want it not to be....how do you percieve this issue?
      • Aug 19 2012: As Pat pointed out, Capital Investment, being the issue. Educated people, if they venture into business, can be held back if there isn't capital to fund their projects which affects more depending on how many job were expected to come out of it.

        I'm not sure if it the same everywhere else, but here (South Africa) we have raw minerals and produce product however China purchases a large amount of the raw minerals and produce yet they supply us cheaper than our local suppliers. I would assume that our demands are greater here, as in people expect better wage and more so the investors are expecting a specific return on investment. Of course the everday running cost as well. All that adds to cost. So in the end the product vs the imported product costs more because the labour and admin costs are greater than that abroad.

        Then we should recognize that governments are responsible for allowing imports to affect the local market. Duties should be set at a rate that keeps to fair pricing between local and import, in that way giving people a choice. Another issue being free trade...everyone is free to import and this seems to be a contributing factor because they operate as a one man show and markups to suite the "one man" vs an organization who caters for perhaps 50 people. How does an establishment compete with that?

        Another issue could be over-population. Can any country cater for all their people? If they can't cater for their people then it becomes another profitable labour force for investors, provided the politics are in favor of investors. People are seen as a resource and if people have too much freedom and rights in a country then it's an issue for investors.
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    Aug 17 2012: Education!

    Aren't there like re-education or rehab centers for this? How about the government pays for an unemployed worker's tuition and finances temporarily, until the worker can go out there and get a new job and make their own income?

    In other words, government is putting money in investment for unemployed workers' re-education, and the return of the investment would be the workers' output in their new professions.

    And I mean, we can create more jobs all we like, but they have to be competent. A competent job demands competent people, and less competent jobs are slowly being taken over by machinery.
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      Aug 17 2012: I think the government does has such programs, but I don't know if it is any beneficial though. =/
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        Aug 17 2012: Yeah, I think the government has the right idea, but their execution and quality of methods is where it needs to improve.
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      Aug 18 2012: James, education or re-education may be the right answer in some circumstances, but the reality is that we have a lot of unemployed educated people right now. The answer for some isn't more skills or education, but changing the way that they seek employment.

      In the 21st century, everyone basically has to constantly be on the look out for their next job.
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        Aug 18 2012: In terms of how people can seek jobs, there are plenty of services online, one of the best ones imo is LinkedIn, but it really depends on the kind of job they're looking for.

        We have all these online resources or flyers/ads and job-searching theoretically shouldn't be such a big problem. If it is, then perhaps they need to learn how to use most resources available to them or the resources themselves need to be easier to use.
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          Aug 18 2012: Maybe simpler would be a nice solution, but everyone gauges "simple" in a different way, so I would say dumb everything down...?
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        Aug 18 2012: @Derek

        I think there needs to be collaborative effort. They need to make things "dumber" while the users need to make the effort to do things "smarter"
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          Aug 20 2012: @James

          In regards to an individual getting "smarter" or more knowledgeable about things new to them, there needs to enough information and enough patient individuals' to teach this new information when help is needed. People without patience should not be advised to teach because they view slower learners as incompetent, whereas the slow learner is just attempting gain a "whole picture" of information.
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        Aug 21 2012: @Derek

        Indeed, and I think patience also applies to the learners just as much too...
  • Aug 16 2012: Yes, if you don't have a job. No taxation withourt representation - sort of. Employers have functionally dropped wages without explaining this as they did before the jGreatg Depression. Reread Recardo "On Wages." What kind of wage structure do we want? You are looking at the wrong end of the mule or rather a number of you are. In this democracy shouldn't we engineer what most people want? Of course, AMericans United is a case that doesn't encourage this as the late Molly Ivans would have told us. Raise wages as Ricardo encouraged two centuries ago and do a better job making things as Shewart, Deming, and Jurin encouraged. This didn't have to happen. It.s just a bubble with greedy people molding thoughts and dreams. Actions have consequences. A structural problem created over forty years doesn't just go away. I live in Texas and if you do this to horses,dogs, or cats you can go to jail..This happens all the time. Am I comparing people to animals? Of course, because we are. Before there was a society dealing with creulty to children in the United States there was the Society Against Cruelty to Animals. Same founder. He just later encountered a sad situation involving a young girl. Does it help to be a Cassandra? I doubt it since Homer told us it is a curse from the gods.
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      Aug 16 2012: Hi george, you begin your response very clear, but I get a bit confused when you bring in other species. Could you clarify it a bit more, please?
  • Aug 16 2012: Cut wages to match that of Asian labor.
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      Aug 16 2012: Don't forget to change the labor laws, quality of air, many lifestyle shifts, and throw in a bunch of other factors.

      That would be illogical to change American wages to match that of Asian labor wages because then the value of all products would not fit the level of wages. No one would be able to buy much. This would some how cause the economy to go into a depression or the national debt would never cease to rise. That would probably decrease the value of the dollar. At least in my small amount of knowledge of the effect of wages on a large scale.
      • Aug 16 2012: yes it would be painful and this is exactly what is coming through the back door. The back door is inflation and a devalued dollar which makes exports less expensive in foreign currencies and American wages able to buy less.

        The over valued dollar makes domestic products too expensive for our domestic consumers to purchase so they by China which can produce them cheaper because of the differential in labor costs.

        The deeper issue: is democracy economically viable? Can a democracy make economically painful decisions instead of the easy way out.

        Inflation will destroy the purchasing power of the dollar so that eventually in real terms of what an hours wage will buy will eventually be the same as what an Asian can buy with an hour's wage.

        Before global trade we were an isolated economy with nearly free commodes from all over the world because no one else besides Europe had the wealth to compete for them. Our wages were not competing with the underdeveloped nations because they did not have the education, tech or capital to put the people to work in a competitive way. They have the education, the capital and the tech now so our wages must be competitive on a global scale now.

        Twenty dollars an hour is ten to twenty times the wage in developing nations. Thus the developing nations are where the investments are being mad because low labor costs means a higher rate of return on the capital invested.

        The West has been balling about China's currency being under priced. That is political smoke screen to cover up the fact that because of our high wages which no one will accept being lowered, the value of the dollar is over priced. Destroying the value of the dollar diminishes the real purchasing value of wages in the USA and thus accomplishing the task of diminishing wages with out having to confront the populace with such an unpopular choice.

        The deeper issue is, can a democracy make economically painful decision? Can a democracy be economically realistic?
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          Aug 17 2012: I guess the next question would be, do we look after the people of the nation or do we seek to protect the assets of the nation?
      • Aug 18 2012: With out real assets the people do not do well and without people the assets are useless/

        By assets I do not mean financial assets. Financial assets are a claim on real assets which produce cars, corn and other stuff people want or need. .

        People and assets are interdependence. The owners of assets would like to break that interdependency with robotics. That way assets do not need pieople for their utilization. Assets will still be dependent upon people for the demand for what the machines make.

        People will be needed as consumers. The rich guys who sell their souls for wealth will still need people to support their self importance. With out an audience the top dog can not be the top dog because there are no other dogs to lord it over.

        Thus the rich who own the assets will take care of the people some how because they need the people in order to feel valid.
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          Aug 18 2012: When you write "some how" that concerns me because some how could mean so many things. Not always is "some how" beneficial....oh the possiblities and how the results never usually equal the possibilities. =/
      • Aug 19 2012: That is because the possibilities imagined are usually tainted by a persons desire of how one wishes it to be instead of understanding the reality of the forces which will determining how it will be.
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    Aug 16 2012: There is a crisis in the sense that so many who want to work are unable to over long periods of time and many work fewer hours than they would prefer or than they need to to make ends meet. What's more, the unemployment is not cyclical but rather structural. By that I mean that as the economy improves, people's jobs will not return because businesses have found processes of production that no longer involve people doing those tasks.
    I have no solution and have no illusion that the problem is actually simple. It is only simple if you are on the sidelines without the responsibility to fix things.
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      Aug 16 2012: Mr. Reisner with all due respect of which plenty is due.

      The problem is painfully simple. The meme to the contrary has permeated the culture and THAT is the problem.

      ONLY 2 times in the past 100years has the POTUS reduced government and 2 times the economy has grown (think exploded) creating prosperity for all.

      The sad thing is that the constituent are not sentient to this FACT. All we has to do is lighten the load on us common folk...
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    Aug 16 2012: As you know yes. The answer is to shrink government.

    Consider that the average business arguably makes a 13% profit. How long does it take for government taxes, licenses, regulations, to eat up that 13%?

    If the business can it simply passes the expense on to the customer. If it can't it changes to a location that does not have the expenses. Or it goes out of business.

    Once again for the slow on the uptake all jobs are created by investment capital if the environment becomes too onerous it moves to where it is treated better.
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      Aug 28 2012: You know where they treat business really well? Think... The South... 1800.
  • Aug 16 2012: Just an idea: One business opportunity can be a door-to-door buy, repair and resell items.
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    Aug 15 2012: Unmployment is a political football. The problem for you and I is how do they reach the statistics.

    Some include part time help as gains in employment. Some are based on how many apply for benefits during the last period. Some say it is the number recieving benefits. How about the ones who are still unemployed and their benefits have ran out.

    This is a spin doctors game. I ignore the stats as they will always reflect the point the politician wants to make. Liers figure and figures lie. They say August was a jump in hiring .... yep all the summer help at Mc Donalds and others went back to school and the companies replaced them. These are not new jobs as the administration would have you believe but just a change of people.

    Yep I think we have a problem but we need to set some rules about how it is measured so that we get a true picture.

    The resolution is political. Taxes, business grants, banking rates, Obana care, Cap and trade, and many other factors are the heart beat and heart break of business and employment.

    All the best. Bob.
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    Aug 15 2012: INSTANTLY? a 3.5 day work week. Twice as much production, and total use of facilities. People who are obsessed with work can work 2 jobs. Those who want more time with family have it instantly. That is my suggestion. A better life for all Americans and any manufacturers will complain because they know no other approach but how else would they get total use of facilities, greater focus and less down time?