All Articles Tagged "employment"
What the President’s ‘Buffett Tax’ Means for the Middle-Class
Monday morning, President Obama presented a plan for long-term debt reduction that included a tax hike for the “wealthiest corporations and richest Americans” who should “pay their fair share.”
GE Capital, which brings in billions of dollars in revenue, legally pays almost nothing in taxes. And billionaires, such as Warren Buffett, hold most of their capital in business assets which are taxed differently.
“Those who have done well, including me, should pay our fair share in taxes to contribute to the nation that made our success possible,” insisted the President. “Nobody wants to punish success in America,” he added, “This is not class warfare. It’s math.”
The plan also called for an end to the Bush tax cuts (which were designed to be temporary) for those with incomes of $250,000 or more, with the idea that increased tax revenue will enable continued funding of entitlement programs, nibble away at the national debt and pay for his stimulus jobs plan.
So, what does this mean for middle-class America?
Not much, really. Don’t expect to see any extra zeros on your bank statement.
Income and age restrictions on food stamps, housing assistance and federally-funded health care limit availability to victims of the recession who are not unemployed but drastically underemployed. Those who were truly middle-class (not just stretching a $35,000 salary to pay for an adjusted rate mortgage on a $300,000 house) do not qualify for welfare programs. Therefore, the President’s pledge not to support a “one-sided deal that hurts folks that are most vulnerable” mostly applies to the poor—a large percentage of which already qualified as poor.
Likewise, what incentive do wealthy individuals have to contribute more of their earnings to a federal government that has proven itself inadequate when it comes to managing money, especially when there is no guarantee that additional tax funds will be used properly? Republicans refuse to pass anything to credit Obama’s presidency; Democrats want to keep minorities hooked on entitlements; and, together they’ve decided what is best isn’t more important than re-election. Few are interested in paying for more Congressional dysfunction.
Job creation is the only thing that can save the middle-class and this economy. Furthermore, who puts people to work? Small businesses and corporations. Since banks won’t lend to small business owners or take chances on budding entrepreneurs with less than stellar credit, employment rests on the shoulders of Big Business. With Bank of America, the U.S. Postal Service and Best Buy scheduled to slash thousands of jobs; presumably a tax increase would further hinder job growth.
Ultimately, the “Buffett Tax” still leaves middle-class people with two choices: pig feet or chitlins.
But hey, he’s trying.
LaShaun Williams is a Madame Noire contributor and columnist whose work has appeared in The New York Times and on several other sites, including the Grio and HuffPost Black Voices. For more commentary on love, race, pop culture and politics, visit her blog Politically Unapologetic or follow her on Twitter @itsmelashaun and Facebook.
Window-Washer and Other Unexpected 6-Figure Jobs
I moved to the United States from Tanzania on a scholarship to the University of Chicago. I studied economics and did really well, so I worked in banking for a while when I finished school. But then my visa expired and I couldn’t get it extended. No one would hire me — it didn’t matter how capable I was. So one day, I was walking around the city trying to think of jobs I might be able to do, and I saw windows all over the place — and I said `That’s it! I’ll be a window washer.’ So that’s what I did. It doesn’t matter if you have visa, as long as you have a Social Security number and pay taxes.
Creating U.S. Jobs: A Double ‘Catch 22’
Workers want to work, and almost every major politician has a plan to create jobs. Before convincing yourself that one plan is better than another, consider a few noteworthy facts and a couple of important realities. Recognize that investment and consumer spending are two sectors of the economy that usually reflect accelerated growth during an expansion—say eight calendar quarters from the bottom of a recession.
According to the official marker of recessions—the National Bureau of Economic Research—the most recent downturn ended in June of 2009.
Eight calendar quarters later (June 2011), the Commerce Department reports that investment spending (9.1%) and consumer spending (4.3%) have accelerated nicely since the bottom of the recession. Growth in investment spending would have been even higher had the residential housing sector (-3.1%) not continued to slump over the period.
Clearly, housing investment is one area where we would usually see more growth at this point in the business cycle. More housing would mean more construction jobs, plus more jobs in the industries that produce goods and services that are associated with the production, maintenance, and operation of homes and households.
Why aren’t more houses being built? Mainly because mortgage bankers were burned during the 2007-2009 recession and they are now very reticent to issue new mortgages. How reticent are they to lend?
According to the June 2011 Federal Reserve Board (FRB) Flow of Funds Accounts, commercial banks now hold about $100 billion less in mortgages than they held in 2007 before the housing bubble began to burst; about $300 billion less than they held in mortgages at the height of the housing market in 2008.
More importantly, commercial banks are holding $1.3 trillion in reserves at the FRB today, compared with just $18 billion in 2007. A similar story holds for chartered commercial banks. New households are forming all the time with housing requirements, and every prospective home buyer has not defaulted on a mortgage. However, banks remain tightfisted when it comes to extending new mortgages.
It seems that banks want to see improved economic conditions before they begin to lend more freely. However, their reticence to lend is preventing improved economic conditions from developing. It’s a “Catch 22.”
What we know is that the economy is not likely to improve significantly until banks begin to release some of the cash that they are hoarding and begin to finance investment in homes and in businesses. Therefore, any plan to create jobs that is to have a chance at success must address this fundamental issue. Whether they are offered loan guarantees, loan subsidies, or tax credits, banks must be incentivized to lend more vigorously. At the same time, banks should not be rewarded for holding vast volumes of reserves at the FRB.
However, even if all of these actions are taken, there is one additional “Catch 22” about which we should be aware. Banks, in large measure, opt not to lend during uncertain times to private sector borrowers when the government offers investment returns that are certain—albeit at low levels. A small certain return trumps a larger uncertain return.
A popular mantra is that we need the economy to grow to create jobs and to increase tax revenues in order to reduce the Federal deficit and debt. Yet the economy will not grow until banks lend to the private sector. However, banks will not lend to the private sector as long as the government continues to expand its deficit and debt by offering safe investment returns,
It appears that we are in a double “Catch 22”?
Dr. B.B. Robinson is an economist and director of BlackEconomics.org, a resource for economic concepts, issues and policies affecting African-Americans.
6 Tips for Landing Work-From-Home Gigs
(Forbes) — 1. Work-at-home scams have been around for decades. In the past few years, the FTC has seen the number of complaints nearly double. Legitimate work-at-home jobs exist, but you’ll need to do some homework to avoid the too good to be true operators. For tips, see AARP’s advice here. The home-based work website ratracerebellion.com, a website co-founded Christine Durst, an internet fraud and safety expert, for example, prescreens job leads.
Davis Legislation Looks at Disparities Facing African Americans
(Chicago Defender) — State Rep. Monique Davis, D-27th Dist., recently sponsored and got passed state legislation that would study the plight of African Americans in this state. PA 97-0460 authorizes the assembly of a Commission to End the Disparities Facing the African American Community Act to look at health, employment criminal justice, education and other issues besetting African American Illinoisans.
Poll Finds Increased Fear Of Job Insecurity Among Employed
By Charlotte Young
It’s not just the unemployed that worry about job security. Those with jobs are increasing growing afraid that they too lack job security, and that their monthly pay checks may soon be replaced with the dreaded pink slip.
Msnbc.com reports on a recent Gallup Poll that reveals 30 percent of workers are worried about getting laid off. This percentage is about the same as the fears in August 2009 and a little higher than the fears of 2010. Economists expect that the new fears are a result of August’s unemployment report that shows although the economy has added jobs since last month, the growth has come incredibly slow.
Sylvia Allegretto, an economist with the Institute for Research on Labor and Employment at the University of California Berkeley, acknowledges that the job growth rate is nowhere near where it should be to lift the US out of its current situation.
It’s understandable, she tells msnbc.com, why those with jobs would be concerned, as the job market continues its slow growth. In addition to the slow rate of job growth, congress’ highly publicized debt ceiling battle and the resulting downgrade decision made by Standard & Poor, didn’t help to assuage the American public’s fear of job insecurity.
The fear is sure to negatively impact the struggling economy. Naroff Economic Advisors’ Joel Naroff relays to msnbc.com that “nothing changes spending habits more than fear.” If people are fearful about losing their job, they are more likely to hold onto their money rather than spend it.
Naroff also says he has seen no signs of any massive layoffs in the near future. With severe cuts already made and the remaining employees working as hard as they can, many companies have no room to cut the employees they have left. While they may be cautious about hiring additional employees, he says they are making no plans to cut their current list of workers.
Even if they may not be worried about losing their jobs, the Gallup poll observes that 44 percent of workers are worried that their benefits and wages may be cut.
Polling firm Ramusson Reports conducted a poll that directly contradicts Naroff’s assertions. Last month a Ramusson Reports poll revealed that 17 percent of workers said their firms were hiring, and 24 percent said their firm was laying people off.
On Wednesday job placement firm Challenger, Gray & Christmas announced that US employers would cut 51,114 workers in August.
How Fast Should the U.S. Economy Grow?
by Dr. B.B Robinson
Everybody knows that the unemployment rate today is 9.1%. Common knowledge is that, to create jobs and to reduce unemployment, the economy should begin to grow much faster than its current, anemic 1.3% rate.
But what are our expectations? How fast should the economy actually grow? These two questions embody several key considerations; including understanding how growth is computed in the context of inflation, what is potential growth, and how fast is too fast.
For the layperson who hears about China’s and India’s economies growing above the 9.0% and 8.0% rate, respectively, it is bothersome to hear that the U.S. economy is growing so slowly. Clearly, the U.S. economy should be able to grow faster.
The U.S. economy can grow faster. However, a key question to ask is how does one measure growth? There are two basic steps to measuring growth. First, one measures output (the value of all final goods and services produced in the economy) at current market prices. The second step is removing inflation. Removing inflation helps us identify increases in real output or the actual quantity of goods and services produced.
For example, if you are told that output increased to 110 this year from 100 last year, then what was the growth rate? An economist will tell you that it depends. If 10 items were produced at a price of 10 each last year and if 11 items were produced this year at a price of 10, then growth has been 10%. On the other hand, if this year the number of items produced remained at 10, but the price of each item rose by 10% to 11, then there has been no real growth. Essentially, to obtain real growth, we must subtract inflation from growth at market prices (i.e., nominal growth).
Now that we understand the relationship between real growth and inflation, we can now turn to potential growth. Recognize that growth at different economy sizes can be quite different. That is, 10% growth for an economy that has size 10 is only 1. However, 10% growth for an economy that has size 100 is 10. Therefore, it is easier to grow fast when you have a small economy than it is to grow rapidly when an economy is large.
In reference to China’s and India’s economy, China’s economy is valued in the $5-to-$6 trillion range. India’s economy is even smaller at about $1.5 trillion. The US economy, on the other hand, is nearly $15 trillion.
Many economists argue that the U.S. economy should be growing at about a 3.5% rate. Given our current inflation rate of about 3.0% based on the Consumer Price Index, the US economy must grow 6.5% at market prices in order to experience 3.5% real growth. Given a $15 trillion economy, that means the U.S. economy must add over $900 billion in new output at market prices to achieve about 3.5% real growth.
Looking at gross domestic product statistics from the U.S. Bureau of Economic Analysis, U.S. Department of Commerce, the U.S. economy has not produced this level of nominal growth at any point over the last 20 year. The nation’s largest growth year during this period in nominal terms was $769.7 billion (6.5%) in 2005. Inflation was 3.3% that year, so we experienced 3.1% real growth. Maybe we should not count on 3.5% growth.
In and of itself, growth is not always peaches and cream. If the economy begins to grow fast, inflation can arise. As output expands, there is upward price pressure on resources. Because we must subtract inflation when measuring real growth, a faster economy (at market prices) accompanied by a higher rate of inflation means that real growth may not accelerate so sharply.
Although we may have every reason to want the U.S. economy to grow faster to help reduce unemployment, and even though that expectation is fueled by fast growth in other economies, there are limits to how fast the U.S. can or should grow—at least as evidenced by growth rates over the past 20 years.
How fast should the economy grow? Like most other economists, my answer is, “As fast as possible without generating high inflation, because inflation is a genie that you don’t want to let out of the bottle.”
Dr. B.B. Robinson is an economist and director of BlackEconomics.org, a resource for economic concepts, issues and policies affecting African-Americans.
Is it Wrong to Only Seek Out Friends Of Your Own Race?
When meeting new people, whether through your job or your interactions with individuals outside of work, do you make an attempt to meet people of races other than your own? A few months back, we asked if having a preference of only dating people of your own race made you racist (most said no of course), but I wonder what it says about you if you prefer to only befriend people of your own racial background? Are you being close-minded, or are you harmlessly going with what you know and feel comfortable with?
I was asked a question similar to this while working at my previous place of employment. I just so happened to eat lunch with, hang out with and meet up with a small group of black women at my job on a daily basis. Though we all worked in different departments, we all seemed to “find” each other. And though I hadn’t gone out of my way to only befriend other black women at my job, they seemed to be some of the few people I talked to there.
The Top 10 Highest-Paying Jobs Requiring a Two Year Degree
By Nola Ogunro
Lack of education is often cited as a main reason for higher rates of African-American unemployment. Yet getting an education to further your career can be a catch-22. Many people cannot afford to take a four-year break from working with little guarantee that they will be able to find a job with their bachelor’s. But this is not a reason to avoid getting a practical education. There are many lucrative careers for which qualified applicants will be in high demand in the coming years, which only require a two-year degree or vocational training. Here are some of the highest paying jobs that require only an associate degree according to the Bureau of Labor Statistics. Four of the highest paying jobs are in healthcare — and almost 600,000 registered nurses will be needed in the coming years. Are some of these jobs that only require a two-year degree right for you? Read on to decide.
Source: Bureau of Labor Statistics
Move from a Bad Job Past to a Promising Present
(Black Enterprise) — Job seekers are often intimidated by having to address previous terminations, significant periods of unemployment, or unfavorable reputation with potential employers. Many professionals feel like they’ll never be able to recover from the effects of their past mistakes or misfortunes, especially if accusations or convictions or criminal activity were involved, which can cause even greater anxiety when having to discuss them. While your past can pose some challenges, the good news is that past professional and personal mistakes don’t have to be detrimental to your future successes. Consider these tips when dealing with any of these common difficulties.
