Why There are so Few Jobs

Bogen Communications has been in the telecom space for a long time and I remember running into the company at shows in the nineties. They currently sell audio systems as well as VoIP gateways and office communications equipment and fell off my personal radar for a number of years. They just reappeared today as the president of the company, Michael P. Fleischer just wrote an opinion piece in the Wall Street Journal regarding why there is so little hiring in the US.

While many of our politicians such as Harry Reid, Nancy Pelosi and President Obama have accelerated the spending excess of the Bush administration, corporate America braces for the impact of higher taxes. To offset these increased taxes companies cut costs which include those associated with current and potentially future employees.

It is my contention that the US is in a jobs war with China and India which started with the advent of the Internet which allowed for the first time for anyone to hire employees anywhere in the world with minimal effort.

To compete with these workers the only logical choice for the US is to reduce friction on business and hiring by reducing spending and taxes. If these policies aren’t followed we will simply lose more jobs.

Yet, as surprising as it seems, I rarely hear economists or politicians discuss international jobs competition and how bad the US is being beaten on a daily basis. It is shocking how people who never held a job and have never made a payroll have found themselves in a position of power where they are responsible for the employment of tens of millions of American workers. When I hear these people speak, it becomes clear my 5-year-old daughter has more business experience. After all, she has at least run a lemonade stand. I’m sorry but being a career politician or community organizer can’t even get you hired in corporate America but somehow these credentials are exactly what is called for in the senate and presidency.

To make the situation much worse, when people are out of the workforce for a long enough period, companies are less likely to ever hire them as they become unskilled in the latest technologies.

So while China, India and others do their best to steal our jobs, federal and state governments have decided that boosting unions which means increased employment costs and increasing spending and taxes are effective policy.

Finally, the country is coming around to the basic concepts those people who businesses have known all along… You don’t boost an econonomy and increase hiring by demonizing those who are successful and forcing them to live in a massively uncertain economic financial climate where new taxes and regulations are springing up faster than senate and congress ethics violations.

As someone who runs a growing company I see how these poor government policies keep us from hiring even more people. It is very sad and once again, if you believe having low unemployment is important, be sure to vote for the most fiscally conservative candidate you can this November and in the future.

But back to Fleisher – he explains how his company which is based in New Jersey spends $74,000 for a hypothetical worker Sally to take home $44,000.

To make matters worse, he explains Obamacare is responsible for a 28% insurance increase which will give the company worse insurance than the previous year.

He finishes with the following statement:

A life in business is filled with uncertainties, but I can be quite sure that every time I hire someone my obligations to the government go up. From where I sit, the government’s message is unmistakable: Creating a new job carries a punishing price.

We are at a serious crossroads here as India and China have just begun taking US jobs. They have over a billion more people to bring into the workforce between them and the US has a few hundred million jobs left for the taking.

Every time you hear a politician (Republican, Democrat, it doesn’t matter) explain they need to spend more money, understand they are taking a proportionate amount of opportunity away from you and your children.

  • richardsprague
    August 10, 2010 at 8:51 am

    As you know, Rich, I live in China now and I can tell you that it would be very easy to hire a worker like Sally for $44K. That’s what it would cost you, the employer, and she would keep most of that. You wouldn’t need an army of accountants and lawyers to keep track of all the rules for employing her because if you don’t treat her well, she’d quit and find a different job — there are plenty of them.

  • IT yousuf
    August 11, 2010 at 4:14 am

    Due to lack of education & skill

  • Rich Tehrani
    August 11, 2010 at 9:01 am

    Rich, the US has a major challenge. We are a “superpower” and are civilized and evolved so we need massive quantities of regulations which govern virtually every aspect of business and even down to the types of jokes we are allowed to make in the workplace. Every aspect of business is controlled and every dollar is taxed to the hilt between states and federal agencies. Then there are countless regulations designed to keep companies ethical and to keep them from underpaying employees.
    While I agree there should be a minimum amount of government regulation preventing employees from abuse and ensuring unethical corporations don’t dump mercury into rivers to pollute them, it is obvious the US has a massive problem on its hands and if employment doesn’t increase, we begin to lose our place as a financial and eventually military power. We subsequently will borrow at higher interest rates which in turn means the cost of doing business and getting a mortgage will rise.
    This administration has shown the government cannot solve problems like unemployment but they are extremely proficient at wasting the savings of the tax payers and their children.
    It is time to realize we need to slash a tremendous amount of regulation, taxes and red tape from business so employers can start hiring.

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