John Kerry's plan for $10 million new jobs

[Sayhey]

I haven't done a study of how realistic this plan is but instead of using other threads for a discussion of the issue I've put it in a thread of its own.

Kerry's plan (http://www.johnkerry.com/issues/economy/10million.html)

[Backtothemac]

I would be really interested to see him create 10million jobs. That number is a little absured. That would give us 0% unemployment, or damn near it. Kind of a fantasy to say the least. Many of the jobs lost under Bush are from the .Com bust, and were not what I call real jobs anyway, I know, I used to have one of them.

[Dont Hurt Me]

I like the part of giving companies a reason to stay rather then giving them every reason in the book to leave, you can not be a superpower without a manufactoring base. Kerry knows this, George and boardroom buddies does not. I am not saying protectionism but iam saying lets stop telling these corporations to leave because of tax code,healthcare,enviroment etc.

[zimv20]

That would give us 0% unemployment, or damn near it.
from the dept of labor (http://www.bls.gov/news.release/empsit.nr0.htm)

The unemployment rate, 5.7 percent, and the number of unemployed persons, 8.4 million, were essentially unchanged in March. [...] Total employment in March held at 138.3 million, and the employment-popula-
tion ratio--the proportion of the population age 16 and over with jobs--was
essentially unchanged at 62.1 percent. The civilian labor force was about
unchanged over the month at 146.7 million, and the labor force participation rate remained at 65.9 percent.


so... 146.7 million * 5.7% ~= 8.4 million "out of work". it's _actually_ the number of people who are looking for work but can't find it. what about those who stopped looking?

from this paul krugman column (http://www.pkarchive.org/column/031204.html):

We don't know why so many people have stopped looking for jobs, but it probably has something to do with the fact that jobs are so hard to find: 40 percent of the unemployed have been out of work more than 15 weeks, a 20-year record. In any case, the administration should feel grateful that so many people have dropped out. As the Economic Policy Institute points out, if they hadn't dropped out, the official unemployment rate would be an eye-popping 7.4 percent, not a politically spinnable 5.6 percent.

let's plug in the 7.4% number...
146.7 million * 7.4% ~= 10.86 million actually out of work

10 million new jobs would not put everyone back to work. i'm not sure over what time period mr. kerry expects to create those jobs, but we should also factor in the population increase over that time period.

btw, i'll be surprised if he's able to create 10 million new jobs over 4 years. if elected, of course.

[Backtothemac]

Ok, please don't think I am an ass ok. But how hard is it really? I just looked in the local paper, and there are probably 300 - 400 jobs (real ones that pay money) just in our city of 65,000 people. I don't know what it is like in big cities or other parts of the country, but also, how many of those that are unemployed are the habitually unemployed people?

Some people just don't want to work. You know. In other words what type of picture do the numbers really paint?

[skunk]

btw, i'll be surprised if he's able to create 10 million new jobs over 4 years. if elected, of course.
He could get some practice in by creating a million jobs in Iraq to re-employ all those soldiers Bremer fired. ;)

[pseudobrit]

from the dept of labor (http://www.bls.gov/news.release/empsit.nr0.htm)


so... 146.7 million * 5.7% ~= 8.4 million "out of work". it's _actually_ the number of people who are looking for work but can't find it. what about those who stopped looking?

from this paul krugman column (http://www.pkarchive.org/column/031204.html):

let's plug in the 7.4% number...
146.7 million * 7.4% ~= 10.86 million actually out of work

10 million new jobs would not put everyone back to work. i'm not sure over what time period mr. kerry expects to create those jobs, but we should also factor in the population increase over that time period.

btw, i'll be surprised if he's able to create 10 million new jobs over 4 years. if elected, of course.

From Dec.-Feb., economists forecasted for 385,000 new jobs and only 124,000 showed up. If constatnt, at that rate, in four years, we'll have 2 million jobs created. At the predicted rate, we'd have 6 million jobs in four years.

So Kerry's plan sounds too ambitious given the current state of the economy.

I'm just glad he has a plan to create jobs that includes more than tax cuts (which have been quite effective for Bush-- for a net loss of millions of jobs to date).

[Desertrat]

Just a sort of point to ponder: If we persuade companies to move operations back to the US, what then happens to those who were employed overseas? If those economies decline, would that not affect our export sales? Then, would that not create an offset in that arena against the repatriated jobs? Another question is that of the hard assets such as real estate. Would the companies possibly have to sell at a loss? Would foreigners, seeing the effect of lost jobs on their own economies, not be loathe to buy? What sorts of values are involved?

On the surface, I'm in favor of his plan. I don't pretend to really know which companies would be most likely to repatriate, nor how much of a factor the tax structure really is for many of them. I remain dubious that the job creation would be as extensive as he believes. I have yet to see any disturbance of a status quo that doesn't have unforeseen negative impacts. In this case, a negative impact could be as I said above, regarding existing jobs connected with exports.

And the issue of wages remains...

Insofar as taxes, he's talking about a one-time garnering of some $60 billion if all profits were repatriated. Absent envisioned increases in sales from repatriated production, how much of that net, after-tax money would be invested? How much would the stockholders want as repatriated dividends? (Dividends have been rather a rarity, for several years now.)

So I want to see some analyses from those who would be affected by this.

Edit: He says foreign tax rates on corporations average around 21%. Ours run 35% and he would lower them to 33.5% Why not lower them to 21%? If taxes are that meaningful, why doesn't he get meaningful?

'Rat

[Sayhey]

I should have started this by saying that 11.5 million jobs were created in the first four years of the Clinton administration and this is only the first of a series of economic planks the Kerry campaign is laying out over the next few weeks. This concentrates, as I'm sure you can tell, on the corporate tax structure.

edit: 'Rat, I would point out this section of his plan

Promoting America's competitiveness in a global economy. Kerry's plan will still allow companies to defer the income they earn when they locate production in a foreign country that serves that foreign country's markets. This will ensure American companies can compete in international markets. For example, if you want to open a hotel in Bermuda, a bank branch in Shanghai to service the Chinese market, or a car factory in India to sell cars in India, you can still defer your foreign income. But if you open up a call center in India to answer calls from outside of India or re-locate abroad to sell cars back to the United States or Canada you must pay taxes just like call centers and auto manufacturers in the United States.

this doesn't deal with all of the concerns you raise, but it does deal with an important part of it.

[Backtothemac]

I should have started this by saying that 11.5 million jobs were created in the first four years of the Clinton administration

You know what is ironic. In Forbes year or so ago, they surveyed the top CEO's from the largest companies out there, and they were ask to give the top 50 reasons for the economic growth of the 90's. Clinton's economic plan was 50th. The internet, Microsoft, Apple, IBM, non traditional companies were the reason for the growth. Ironiclly, Bush 1's economic policy was ranked higher than Clinton's.

[Dont Hurt Me]

Some of Bush sr's policies helped Clinton early on. But Clinton was a fiscal conservative which road this wave. George blew everything that was saved by Clinton. Thats the bottom line.

[Desertrat]

We were coming out of a mild recession during Clinton's first campaign, and on the verge of the dot-com revolution. There was a sea-change in the very meaning of "work", as commented upon in numerous writings on the subject. I imagine a goodly number of that 11 million were re-hires. Also, at that time, given that the recession had been mostly white collar, we had a surplus of educated and experienced people with experience in business. Our present jobs needs include some of these--after the dot-com bust--as well as many for the once higher-paid blue-collar types.

I've said before that we're at a point in time when we need more people whose revolutionary ideas about products lead to new equivalents of the Microsofts or a new GM or GE or whatever. The not only better but new mousetrap, if you will. We need more Edisons and Bells and Jobs and Gates and many more. Even then, given the ever-accelerating time rate of change, we need an ongoing supply of these folks. Reverse engineering is still a fact of life.

'Rat

[SlyHunter]

I heard on Hannity and Colmes that economist predicted 10 million new jobs would be created in the next 4 years irregardless as to who was president as long as he did nothing to affect the economy either direction. That we are going to have to get on immigrations butt to increase "legal" immigration to keep up with the increase demand for employees. I heard somewhere else tho that high tech or jobs requireing college would still continue to be outsources because 1. We don't have enough people graduating college (ie qualified individuals) and 2. their cheaper. Computer programmers, telemarketers (I know they don't need a college degee) etc.

If Kerry plans on increasing tarriffs on imports to force companies who sell in the US to manufacture in the US then I'm sure the WTO would react and cancel anythign he did by reacting or realistically overreacting to his changes.

[Sayhey]

You know what is ironic. In Forbes year or so ago, they surveyed the top CEO's from the largest companies out there, and they were ask to give the top 50 reasons for the economic growth of the 90's. Clinton's economic plan was 50th. The internet, Microsoft, Apple, IBM, non traditional companies were the reason for the growth. Ironiclly, Bush 1's economic policy was ranked higher than Clinton's.

B2TM,

I didn't post the Clinton figure to argue about how much of the growth was from Clinton's policies. We can argue that if you want, although it is a departure from the central focus of the thread. My point was only to show that the 10 million figure that Kerry is putting out is not necessarily an outrageous number of jobs. It would be a massive turn around from Bush's record, and maybe it is unrealistic in the current economy, but it wouldn't be unprecedented.

Two other things. First, when looking at job production it is always important to remember that it is a dynamic thing, by which I mean the job seeking population in always growing. From what I understand, we have to produce at least 150,000 new jobs a month just to keep up with new people entering the workforce. So if we must produce 1,800,000 jobs per year to keep the true number of unemployed from growing, we aren't going to reach full employment within four years.

Second, the key to Kerry's proposals, so far, are common sense restructuring of the tax codes to eliminate incentives to take jobs overseas, at least those enterprises aimed at the US market. This is not done with tariffs as some have tried to say, but with a combination of incentives and equalizing of tax responsibilities for US corporations operating here and abroad. I don't see much of an argument against these measures, regardless if they produce much of the turn around in job production. We certainly shouldn't encourage the loss of jobs.

[Desertrat]

Still, it seems to me that a reduction in a tax rate from 35% to 33.5% just isn't nearly enough to really make a difference in boardroom thinking. From a money standpoint, it would be better to bail out entirely, and pay 21% to the foreign countries as Kerry mentioned. Put the Hq overseas, and have a "foreign subsidiary" in the U.S.

'Rat

[Ugg]

Still, it seems to me that a reduction in a tax rate from 35% to 33.5% just isn't nearly enough to really make a difference in boardroom thinking. From a money standpoint, it would be better to bail out entirely, and pay 21% to the foreign countries as Kerry mentioned. Put the Hq overseas, and have a "foreign subsidiary" in the U.S.

'Rat

Come on 'Rat, the reality is that very, very few companies pay anywhere near that much in tax every year. Now if we were to eliminate all the tax shelters and writeoffs and stock options and all the other fiddles that the accountants and attorneys and sleezy government types have come up and THEN create a 21% corporate tax rate, I, and I'm sure most Americans would be all for it.

There was an article recently that said only 61% of all American companies pay taxes. That number has been growing and growing and growing and yet personal tax rates despite gw's much ballyhooed tax cuts have been increasing for most Americans.

[Backtothemac]

Sayhey, na, man, it is cool, I caught your point, I was just throwing some stuff out into the mix. ;)

[Sayhey]

Sayhey, na, man, it is cool, I caught your point, I was just throwing some stuff out into the mix. ;)

Not a problem, keep doing so.

[IJ Reilly]

We were coming out of a mild recession during Clinton's first campaign, and on the verge of the dot-com revolution.

Just a point of order. This recession might have been "mild" where you live, but here in California it was regarded as the worst economic period since the Great Depression.

[thatwendigo]

I've advocated a certain stance for years, and it's yet to see the light in a major political party.

Three simple letters: CCC.

Bring back the CCC, maintain the parks and roads, accomplish many of the ecological and transportation needs, while also providing a non-military option to those who don't have the white-collar or high-experience blue-collar skills that we need right now.

Pay a bit above minimum wage in deferred checks (you get the whole chunk after you're done, minus, say, a 10% luxuries allowance handed out each month), but house and feed them in simplistic ways.

[SlyHunter]

I've advocated a certain stance for years, and it's yet to see the light in a major political party.

Three simple letters: CCC.

Bring back the CCC, maintain the parks and roads, accomplish many of the ecological and transportation needs, while also providing a non-military option to those who don't have the white-collar or high-experience blue-collar skills that we need right now.

Pay a bit above minimum wage in deferred checks (you get the whole chunk after you're done, minus, say, a 10% luxuries allowance handed out each month), but house and feed them in simplistic ways.
Sorry I never heard of CCC.
I see it as a symbol for the Soviet Union, the Champus Crusade for christ, Chinease Council Center, and other things but I have a sneaky suspicion you don't mean none of those.

[thatwendigo]

Sorry I never heard of CCC.
I see it as a symbol for the Soviet Union, the Champus Crusade for christ, Chinease Council Center, and other things but I have a sneaky suspicion you don't mean none of those.

Apparently you didn't pass history, either, when you were in college.

The CCC is the Civilian Conservation Corps, a program established during the Depression era in order to employ and feed a large number of young men who weren't finding work anywhere else. It housed and fed them, along with paying them, and in return, they would maintain national parks, roads, and other federal works.

[Desertrat]

And as well as the CCC, there was the Works Progress Administration (if I recall WPA corectly) which provided some depression-era jobs. Also, the feds had their own NRA, the National Recovery Administration.

My uncle was a highway engineer on a stretch of US 281 north of San Antonio in the 1930s. The WPA provided some of the money for the project. He once commented, "Ol' Lyndon could lean on a shovel with the best of them." :) LBJ was then a college student and needed the money from a summer job...

When you see stone cabins in a national park, or a hand-laid rock retaining wall along an older stretch of highway, odds are they were CCC or WPA built.

Unemployment back then ran toward 25%. We might give some thought to the social consequences were such to ever return. IMO, "Ugly" is way too mild.

Christmases were rather slim times, in the '30s and early '40s. The rest of the year was pretty much zero, zilch, nada, for me and most kids I knew.

Enuf,

'Rat

[SlyHunter]

25%? Thats allot higher than 5.7% we have now. I remember a time when "we the people", or those who spoke for us about such matters thought that it was impossible to get the unemployment rate below 5% because the unemployable would fill it up to the percentage.

[Desertrat]

That 5.7% doesn't include those who have given up looking. I've read estimates of some 3% or so of the workforce fitting that category. Then there are the 'underemployed" who have a parttime job of 20 hours or so who might as well be unemployed; this seems to be another 2% or 3%. Some number-crunchers believe the true unemployment rate is really around 10%, if these other two group are included. IIRC, the "workforce" is roughly 140 million, although somebody might have a more up-to-date number than that.

'Rat