What could be done to create large scale employment?

Minimum wage jobs only make up a small percentage of the workforce. Do companies today collude to force everyone to work for minimum wage? Of course not. The minimum wage is just a ban on low value labor.

They might not accept eliminating the minimum wage, but most Americans have little to no understanding of the economy as demonstrated by your comment.

 

I think elimination of the minimum wage can exist in the United States if we require that all labor contracts be collectively bargained. Germany seems to have success with such a system.

 

Look, I will admit that there was a resale market for mortgages. That market is known as Fannie Mae and Freddie Mac. I will also admit that they had the ability to create MBS's regardless of Glass-Steagall provisions. However, I will not admit that Glass-Steagall's repeal did not lead to the financial crisis.

 

No, you and others have repeatedly told me. Frankly, I'm surprised at the low level of proof required for this belief. Basically, none seems to be required. Just say it enough and it's a fact.

 

Nobody's asking you to. But there seems to be no level of proof required for this belief.

 

I did provide proof in a previous post. From my perspective, there were two subprime mortgage crises. One occurred in the GSE's, aka the resale market for mortgages, the other occurred in the private sector, on the trading floors of Bear Stearns, Lehman Brothers, etc. Gramm-Leach-Bliley created the private sector problem.

My evidence can be found in the quotes of Richard S. Fuld and other active and former Wall Street CEO's. If you want a comprehensive description, read and watch the following books/movies:

1. The Movie Too Big to Fail
2. The Book Too Big To Fail: The Inside Story of How Wall Street and Washington fought the Financial Sector-and Themselves by Andrew Ross Sorkin.
3. The Movie Inside Job by Charles Ferguson
4. The Book The Big Short by Michael Lewis
5. The Book Boomerang by Michael Lewis

This is simply starter's material.

 

I would also recommend the book Griftopia by Matt Taibbi on this subject.

 

The government has no responsibility to "create" jobs, nor does it have any mechanism TO create jobs, other than govt jobs.
The private sector creates jobs by necessity, not by responsibility.

What the govt can do and has a responsibility to do. Is to NOT Block an environment wherein the private sector can grow and prosper, thereby the private sector will create jobs out of their own necessity.
The govt can allow a job creating environment to exist by minimizing regulations. Especially internal regulations [telling the private sector HOW to run their businesses]. Have only regulations giving the private sector a track to run on, instead of telling them HOW to run on the track.

Taxes, cut business taxes. The USA has the highest business taxes in the world. Between Federal and State taxes, about 40%. At those tax rates, WHY is anyone surprised that businesses move offshore and foreign businesses are loath to locate here? And the taxes are only part of the problem. We have a gross overabundance of regulations. EACH regulation comes with a cost factor. Its not considered a tax, but it is another tax on top of the 40%. I've read that EACH regulation costs $60.00 for each time it must be acknowledged. Some come into play numerous times daily.

What govt should do? Get out of the way. Government help is a long, long, long list of terrible "unintended consequences."

 

The private sector is no more than a mafia style criminal enterprise. Yeah...government just get out of the way....and watch us all be working for less than half of minimum wage, and everybody will get cancer inside of a year. Great plan...let the fox take care of the hens....yeah...brilliant friggin' idea!!!

 

Well said.

Regulations are not there to create unemployment, nor stop innovative companies from growing, I hear that said, but it is BS.

They are there for a very good reason - because without them, many employers WOULD engage in abuses, exploitation, and cost cutting measures which would be dangerous.

 

The problem is that these jobs are parasitic sucking the blood from the private sector and the US economy.

 

With all due respect to Thomas Sowell he presents a false dichotomy. While perhaps there is a correlation the cause and effect of the minimum wage is not established.

My personal opinion is that the violation of contract law related to legal tender promissory notes is the primary cause of increased poverty in general and unemployment as well as the racist discrimination which prevented African-Americans moving into "white" society and employment after the Civil Rights laws of the 1960's. The laws eliminated government discrimination providing hope for African-Americans but the inherent discrimination of individuals and enterprise has not yet been overcome.

 

What isn't counted in this are how many private sector jobs were lost because of government. The government is inherently parasitic taking from those that produce wealth. To a limited extent government can reinvest is creating more wealth but the inherent overhead and incompetence of government reduces the overal reinvestment.

 

Uh what? Would you care to elaborate here? It's well known that minimum wage laws limit employment opportunities. Generally minimum wage is set low enough as to have no real effect however. As a mental exercise, what do you think the effect would be of a $20 minimum wage? Sowell is using black teenagers as a group who actually are limited by minimum wage laws, but teenagers of any race would also work. He is using black teenagers to point out that youth unemployment even amongst blacks has historically been very low when we in effect did not have a minimum wage.

This has nothing to do with adult black unemployment or racism. It has everything to do with the fact that people age 16-20 are often not worth paying minimum wage and are limited in employment opportunities by minimum wage laws.

I don't think you understood his argument, at all. Try reading the article again.

 

How does increasing the circulation of money in money based markets do anything other cause those economic phenomena usually associated with it? Simplifying our public policy schemes should improve the efficiency of our economy.

 

What complete dribble. Everything we have came from the private sector. Governments produce nothing except waste and debt.

 

Even though Thomas Sowell presents correlation he still presents a false dichotomy because he doesn't establish causation.

Minimum wage is generally related to entry level employment where basically no skills other that a good work ethic are necessary. While overall I see the failure of contract law related to legal tender promissory notes the problem specific to African-America youth is more likely related to the general lack of opportunity based upon racist discrimination that affects the adults. If "Dad" can't get a job because of discrimination then "son" doesn't learn work ethics related to "dad's" employment. Work ethics are overwhelmingly learned from one's parents.

The problem becomes worse when "dad" has been arrested and incarcerated for the crime of "driving while black" (an expression used to reflect the laws that are used to disproportionately incarcerate African-Americans such the War on Drugs). "White" society had loaded the odds against black youth. We've created laws based upon racial suppression (e.g. marijuana and cocaine prohibition laws can be directly tied to racism in America) which has, in many cases, destroyed the "family" of African-Americans. Many like to make whining statements about single black moms raising kids but live in denial that "White Racism" has, to a significant degree, contributed to the decay of the Black Family in America.

On a final note related to minimum wage. I live in WA and read that this last summer about 25% of the agriculture crop in Eastern Washington went unharvested. These weren't even minimum wage jobs (i.e. they pay slightly higher) and require no real skills except the willingness to work. The growers simply couldn't find workers to fill the jobs for the harvest. Year ago high school students filled these jobs as part time labor but they don't do that anymore. Too much work and mom and dad will give the kids money so they don't need the job. Even during the depth of the recession I saw employment at MacDonalds and other fast food places. The work was there but people won't work starting at minimum wage even when benefits such as health insurance are offered.

The problem isn't minimum wage but instead undeveloped work ethics and a refusal by many young people to accept minimum wage entry level jobs. The jobs do exist.

 

Why do you keep resorting to your propaganda and rhetoric, instead of a more rational argument?

I wouldn't call the Space Race or our landing on the moon, via forms of central planning, nothing.

 

Wrong, and I provided the link 2X.
Gov't has spurred great economic improvements when pvt sector deemed it not worthy. Many times.

 

Yes, because an educated society isn't gonna produce anything. LOL.

 

I didn't see your facts or link to back up how much gov't has taken away either.
So the free/toll way system was a waste?
Airline was a waste?
NASA was a waste?
All those took jobs out of the economy?

 

The reason that we have a poor work ethic is because we have a hamock called welfare. It hands you the equivelent of $15 or so to sit on your butt and play games and watch TV. So a job that doesn't give lazy Americans at least that much is now "beneath Americans", which is why we import illegal mexicans to do actual labor.

The minimum wages, is however MUCH MUCH too high. $7.25 is a joke when you consider that for the exact same price you can hire a COLLEGE GRADUATE in India, it seems to beg the question of what kinds of companies can AFFORD to hire Americans. At this point, it's a charity and that isn't sustainable. Until our wage structure reaches parity with the rest of the world, unemployment is going to be high and continue to rise (hidden of course by dropouts) until Americans get it. I'm not holding my breath.

 

The dribbling comes primarily from your side of the aisle sir.
LABOR produces wealth. Without IT....there can be no wealth. LABOR is harvested, sold, and manipulated for profit.

There is no other form of wealth creation except someones labor. ...not the smoke and mirrors of Wall street thieves, creative accounts, or CEO Hoorsz. Actual, good old fashioned, LABOR, and PEOPLE provide the labor, which in turn, provide the wealth....not the other way around. If wealth is the end all, why don't billionaires just create wealth between themselves, BY THEMSELVES?

It USED to be about a partnership between labor and investors that made the world go round....now, it's just corporate investors seeking the most profit, the quickest way, and finding a way to dump the toxicity of their actions onto someone else. THAT is what this corrupt system of ours is today....no partnership....no humanity...no decency.....just PROFIT and GREED, and not one thing else. The abyss that swallows us all....

Your "private sector" has failed miserably.

 

Ok, first of all you are misusing the term 'false dichotomy' which is just bugging me. Secondly causation cannot be determined solely by statistical means. It's almost impossible to establish causation in a social science like macro economics so you are holding his essay to ridiculous criteria. At best he can establish a strong correlation with multiple incidents and propose a plausible causal relationship.

Tell you what, after you google false dichotomy to learn what the term means. Why don't you google how to establish causation and tell me what Sowell would have to do to establish causation with his theory.

Then you go on to talk about unrelated anecdotes of racism and finish with "no one wants to work at McDonalds where I live." That may very well be true. But there are McDonalds in the country recieving thousands of applications. Look, feel free to criticise his theory. That's all it is. But your comments regarding his failure to establish causation are just ridiculous.

 

I believe an excellent example can be provided that establishes the fact that jobs "created" by government are a losing proposition.

The Stimulas by the Obama adminstration spent about $400 billion to create jobs (the balance was tax breaks) and they claimed that is "saved or created" 2 million jobs (a disputed claim but one worth using). Simple math reflects that this equates to $200,000 per job but the average job probably paid between $30,000 to $70,000 per year. That reflects an average "waste" of $150,000 per job either saved or created.

As for highways (free/toll way systems) they can certainly be constructed for far less cost than the government spends per mile by the private sector. All additional costs are a waste of money.

I don't know what is being referred to as "airline" but I assume this means airports and air traffic control. Once again the private sector can provide the same airports and air traffic control for less money which reflects a waste of money.

NASA certainly spends more than necessary. The manned space program during the 1960's was an example of extreme spending solely for political propaganda purposes. As we've seen documented in recent history suborbital manned space flight was accomplished by a private company for about $15 million dollars in today's dollars and NASA spent about $50 million in 1960's dollars to accomplish the same goal. Was the propaganda worth it would be the question because the actual accomplishment wasn't worth the dollars spent.