Employers Say Jobs Plan Won’t Lead to Hiring Spur

[Better Believe It]

Employers Say Jobs Plan Won’t Lead to Hiring Spur
By MOTOKO RICH
September 9, 2011

The dismal state of the economy is the main reason many companies are reluctant to hire workers, and few executives are saying that President Obama’s jobs plan — while welcome — will change their minds any time soon.

That sentiment was echoed across numerous industries by executives in companies big and small on Friday, underscoring the challenge for the Obama administration as it tries to encourage hiring and perk up the moribund economy.

As President Obama faced an uphill battle in Congress to win support even for portions of the plan, many employers dismissed the notion that any particular tax break or incentive would be persuasive. Instead, they said they tended to hire more workers or expand when the economy improved.

“You still need to have the business need to hire,” said Jeffery Braverman, owner of Nutsonline, an e-commerce company in Cranford, N.J., that sells nuts and dried fruit. While a $4,000 credit could offset the cost of the company’s lowest-cost health insurance plan, he said, it would not spur him to hire someone. “Business demand is what drives hiring,” he said.

Read the full article at:

http://www.nytimes.com/2011/09/10/business/economy/in-the-real-world-will-the-jobs-plan-make-a-difference.html?_r=2&pagewanted=1&hpw

[chill_wind]

1. "tinkering around the edges"

The problem is that the president believes we can cure our jobless problem by providing the proper incentives to the business community. And here he is committing one of the few big policy blunders from Lyndon Johnson’s War on Poverty. Like Johnson, who focused on retraining the unemployed for jobs that did not exist, Obama has focused on incentivizing the businesses community to hire workers to produce for customers that do not exist. Time and again, Obama has shown that he will only tinker around the edges, relying on the same tired supply-side initiatives that will not work: more incentives to build business confidence, subsidies to reduce labor costs and to promote exports, and maybe even tax cuts to please Republicans. He told a Labor Day crowd in Detroit that he wants to match the more than 1 million construction workers with an infrastructure-related rebuilding program to improve the nation’s roads and bridges. That is an improvement over his efforts to date, but it falls far short of the 20-plus million jobs we need.

For more than two years, we’ve listened to policy wonks weighing in on the supposed recovery, reading great importance into every tiny click of the unemployment rate, fluctuation of retail sales data, rise or fall of the Dow, and—especially—the latest measure of business confidence and expectations. Economists and policymakers alike appear to believe that if we can only improve the outlook of our entrepreneurs, they will suddenly begin hiring. All the nation needs is a bit of Prozac slipped into the martinis of the captains of industry to turn this ship around. And the Republicans warn of the depressing effects of Obamacare, Dodd-Frank regulations and EPA restrictions that damage the sentiments on Wall Street.

The truth is simple and contrary to these views. Business will not hire more workers until it has more sales. Consumers will not spend more until they’ve got more jobs. A private-sector recovery requires 300,000 new jobs every month. But the private sector doesn’t need 300,000 new workers per month to meet prospective sales.

The new jobs can only come from the federal government—the only economic entity that can afford to hire. Obama’s 1 million infrastructure jobs is a nice down payment, but it is only three month’s worth. New workers will create the sales that firms need to justify new hiring. Still, we must think bigger if we are to create 20 million jobs.

What the Country Needs Is a New New Deal
http://www.truthdig.com/report/item/with_300_billion_the_president_can_reduce_unemployment_to_zero_20110908/

http://www.counterpunch.org/2011/09/09/toward-a-new-new-deal/


L. Randall Wray is a professor of economics and research director of the Center for Full Employment and Price Stability at the University of Missouri–Kansas City.

Stephanie Kelton is an associate professor at the University of Missouri-Kansas City and a research scholar at the Levy Economics Institute in New York.

[obxhead]

2. k/r