Simple question: Why is the U.S. economy incapable of creating jobs right now????

[Politics_Guy25]

I see weekly jobless claims jumped to 435,000 today, sharply up.

So, my simple question, because I honestly don't know the answer, is why the hell is the US economy not creating jobs at a pace to match population growth? What is going on to make this a jobless recovery the likes of which hasn't been seen ever?

The Fed has spent $12 trillion to try to stabilize things. We have had $3 Trillion in combined stimulus efforts. Nothing works. Nothing.

Ughhhhhhhhhhhhhh.............

[jody]

1. Simple answer, no demand for products and services. n/t

[AlanAdam]

42. And if demand increased, then what?

Manufacturing employment here in the U.S. would increase slightly, but the main growth in employment would be overseas where so many manufacturing jobs have been offshored. I believe that the core of the problem is not with demand but in what is motivating companies to move their operations overseas. I don't know if there is a realistic solution to this problem, but if a solution does exist the first step to finding it is correctly identifying the root cause of the problem. At least that's my opinion.

[Auggie]

2. The jobs are overseas

The stimulus is a lot of bullshit IMO

[Politics_Guy25]

6. I should note that the employment picture is not nearly as bad

in the other G-20 countries. Shocking.

[OhioChick]

66. Bingo. n/t

[leftstreet]

3. Because it's a capitalist system & the capitalists are investing elsewhere

Why would they create jobs here until we're all happy to get minimum wages?

[The Magistrate]

4. Because People With Money See No Profit In Hiring People Here, Sir

And do not stand to lose any money by not hiring people. Indeed, not hiring lets them make more money, as it gives them a club with which to drive down wages.

[Politics_Guy25]

11. Is it a deliberate attempt to sabotage President Obama then?

They did create jobs for Bush, Reagan, and Clinton....

[The Magistrate]

21. That Is Not Impossible As A Motive, Sir

Capital went 'on strike' against President Carter, for instance.

But at this point, with the sums being sat upon by corporations, and profits rising while wages fall and the number of people out of work and under-employed remains nearly a fifth of the adult population, it is pretty obvious decisions not to hire are being made, and they will be made on the basis of some reasonable, if perhaps ruthless, calculation of potential profit and loss.

[rfranklin]

25. Net job creation under Bush was zero...

The economy was kept going by the flow of money created by real estate appreciation and easy credit.

[guruoo]

37. It's their new religion....

Set in a near-future U.S.A., Ayn Rand's thrilling masterpiece features the
mysterious disappearance of the top innovators and industrialists—and demonstrates
a new moral philosophy: the morality of rational self-interest.

http://atlasshrugged.com/

"The question isn't who is going to let me;
it's who is going to stop me." -Ayn Rand

[guruoo]

27. And in the meantime, they'll turn the screws to force those that remain to take up the slack

[Botany]

5. Because the corporations are sitting on tons of cash and not hiring ....

.... people.

How ever the past 12 months have all seen a gain in private sector jobs.

[TheKentuckian]

28. Their is no incentive to invest those resources. Hiring doesn't create profit until

demand exceeds your ability to produce not always the most revenue but profit after absurd salaries and bonuses.

You use trade law, the tax code, and public policy to create sticks and carrots.

That fucked up secular religion that passes for economics in popular culture and most of the schools is a scammy flammy shammy mammy that has to be taken with a grain of salt, at most.

[AlanAdam]

38. This isn't an answer, it's a tautology.

It's like saying all bachelors are unmarried. It's a true statement but it doesn't provide any useful information. I suspect that the accumulation of quality jobs moved overseas, the result of a trend that has occurring for many years, finally reached a level that is causing real pain here. Unfortunately, this pain will do nothing but increase long term. The U.S. needs a comprehensive national economic (jobs) policy real fast. We need to get a clue -- our major jobs competitors in the world aren't playing by the same rules that we are.

[Arctic Dave]

7. They are, overseas.

[muntrv]

8. Because the jobs are overseas.

[somone]

9. Shitloads of cash in the banks and corporate coffers

but let's keep everyone else poor, lest they bridge the gap

[Courtesy Flush]

60. Corporate America is withholding the recovery.

They're sitting on a trillion dollars in cash.

[Webster Green]

10. No more manufacturing base.

With most of the mfg jobs sent overseas, we're left with a service economy. Without jobs that produce something of value, we're fucked.

There are only so many jobs around to provide services to the few who can still afford them.

Of course, I'm no economist, so I may be totally wrong, but that's my take.

[Politics_Guy25]

13. I've given up hope on the employment picture

I don't think it will improve like ever...

[area51]

59. The only way it'll improve

is to start up a new WPA, and for congress to impose heavy taxes on offshored jobs. Otherwise we'll never leave 30½% unemployment.

[knitter4democracy]

48. This. Ever so much this.

It's a huge, huge problem.

[pampango]

56. "U.S. is Still the World's #1 Manufacturer"

http://mjperry.blogspot.com/2011/01/us-is-still-worlds-1-manufacturer.html



In terms of the total amount of manufacturing produced in a year, the United States still leads the world in annual manufacturing, see chart below for the 2009 rankings of the top seven countries in the world for factory output.

In 2009, the United States produced almost 14% more manufacturing output than second place China, and produced almost as much ($2,334 billion) as Japan, Germany, Italy, France and the U.K. combined ($2,762 billion).

Although it's true that the U.S. has lost more than 7 million manufacturing jobs, from an employment level of more than 19 million manufacturing jobs in the late 1970s to fewer than 12 million jobs today, that's happened at the same time that U.S. manufacturing output has continued to expand and grow. In 2009, the U.S. produced more manufacturing output, $2.334 trillion, than ever before in history (nominal dollars), see chart:


----------------------------------------------------------------------------------------------------------------------
The real issue is not that "we don't make anything anymore" it's that fewer people are employed making things. That is true in all developed economies.

[Anakin Skywalker]

12. Because the money went towards bonuses for CEOs?

[zipplewrath]

14. Simple Question, complex answers

The economy is trying to contract, not expand. Housing prices are too high, there is too much debt, people aren't spending, and the result is people losing their jobs, which means that there is deflationary pressures on prices, lower profits, and fewer jobs. Which leads to less consuming, more bad debt, and lower housing prices. Which leads to fewer jobs......


The reason that the government should be hiring, and spending, is to break that cycle.

Instead, we're giving tax breaks to people who already weren't spending, not to mention not hiring.

[PDJane]

15. Because:

1. All the money is flowing to the top, and isn't being taxed back at the rate it should be.
2. The monetary system is been pillaged, quite systematically. Money for jobs has moved offshore.
3. The offshore jobs are the manufacturing jobs, which leaves very little in the way of work for America, unless it is a service job, and those are being cut as fast as it can be done.
4. Corporations are sitting on money, often bail out money, instead of spending it on American jobs. Part of that is that they are worried about the economic forecast....but their actions are making a depression more certain.
5. The GOP has been in power too long, and the Chicago system has become "The Washington Consensus." That means that there is no concern for the poor....and concern for the poor is not in the purview of the GOP, who seem to have taken over the whole discourse in Washington.
6. Because there are no jobs, the middle class is becoming part of the homeless problem........and the money from those foreclosures is, again, flowing to the top.

It's a vicious circle and it's not sustainable.

[Poboy]

32. Nice summary.

[jwirr]

46. That seems to be it.

[flying rabbit]

52. Yes. n/t

[steve2470]

58. great summary nt

[mrdmk]

64. Thank-you for putting this forward!

Also needed in your statement is the lack of regulation. It seems if the scam is complicated enough, our laws are not invoked fully, only a paltry fine.

Another problem is the oligarchy that has been called 'to big to fail!' The lack of competition is squeezing last cent in the name of efficiency i.e. not enough life-time jobs being created to cover the growing work force.

This type of economy is not sustainable is the final word.

[Motown_Johnny]

16. We create plenty of jobs, In China, Japan, Korea, Mexico, Canada.......

[NNN0LHI]

29. Seen an advertisement for VW Jetta with a song called ... Another day, another dollar

In the ad some guy is portrayed working 3 or 4 shitty jobs(Emptying bed pans and such), so he can go buy an imported Jetta. In other words very truthful.

Don

[Hannah Bell]

17. i'd bet that's christmas hires getting canned. job creation isn't happening

because the people with the money aren't "investing" in the us.

they're "investing" overseas & speculating on food.

I don't know if you've ever lived in a town that loses its major businesses -- it happened to my town in the 80s. Some of the big mills pulled out.

Until then it had been a relatively prosperous democratic union town.

After that the downtown area turned into a ghetto, drugs came in in an obvious way, people turned right, & the difference between the well-off folks who ran things & everyone else became manifest.

It's because big money pulled out. Nothing ever came in to replace it.

What happened on a small scale to hundreds of towns or regions through US history (think of the textile industry hopping from New England to the South to China) is happening to the US as a whole. Big money is pulling out & moving elsewhere.

[Politics_Guy25]

19. You think with his job at stake that the President would try to fix this....n/t.

[yourout]

26. Afraid he blew his chance.......the stimulus should have been triple it's size and....

should have been implemented much faster with the focus almost exclusively on wages and little to nothing on tax breaks except for equipment purchases and construction.

Either wage equalization tariffs or straight up import tariffs should have been added.

[Hannah Bell]

30. yep; as i recall, about half the stimulus was tax breaks.

[Gaedel]

61. Another big chunk of it

Went to bail out the budget shortfalls of states and localities so that they wouldn't lay off government workers. It helped to keep their jobs, but it didn't do much to jump start the economy.

[jtown1123]

65. Yes and tax breaks don't create jobs...

[elleng]

18. Politically incapable.

[NNN0LHI]

20. Bad news. I think 10% unemployment is going to be the norm

Our citizens prefer buying imported products even if it means there will be no jobs for them or the next generation.

Combination of poor upbringing and an educational system that must omit simple economics from the curriculum.

Don

[yourout]

22. Here is what I think....

The rich and the powerful see this as an opportunity to grab control of both the Congress and the Presidency by keeping the economy in the tank for two more years. They already have control of the SCOTUS and if they are able to complete the sweep they can completely outsource everything with no impunity.

Wages will continue to plunge as we are pitted against slave wage countries and what little remaining manufacturing is sent offshore or forced to compete at unsustainable wage levels.

Unions will be attacked and attacked and attacked.

The USA is becoming a modern day Feudal society.

[Junkdrawer]

23. Pick up a book by Kevin Phillips. We've moved from a manufacturing economy....

to an economy dominated by financial services. Less jobs, but more money for the top classes...until it all collapses.

Welcome to the collapse.

[mmonk]

24. Because tax cuts don't create jobs. Neither does cutting government services.

Neither does cutting benefits from social security and medicare. Neither does more free trade agreements. Neither does weak regulations. Neither does privatizing everything. Neither does union busting or firing public school teachers. Only demand does. But both parties have accepted Reaganomics as their policy. So in a way, we're all Republicans now. And if you don't accept it, you're left. And you've probably heard all the things that are wrong and unreasonable with the left.

[NCarolinawoman]

31. I remember Ross Perrot predicting there would be "a giant sucking sound" of

jobs going overseas if NAFTA was passed. That was the theme of his 1992 Presidential campaign. He would cup his hands to his ears to make the point.

Many made fun of Perrot. I may have been one of them--I think I was too young and ignorant to understand.
Unfortunately, Perrot had it absolutely right. :(

[Possumpoint]

33. Simple Answer

High standards of living and high wages were compared to the rest of the world. Those with money realized that if they could convince everyone that there was a benefit in shipping high price jobs overseas to cheaper labor they could make higher profits. NAFTA and other free trade agreements were made and a giant sucking sound began. Now with 90% of our manufacturing base gone we don't have the economic base to pull ourselves out of this mess.

There those who feel we need to bring our wages and standards of living down to an equal level so we can compete. I'm 64 and hope to be gone before then.

The stimulus money spent went for the most part to support the status quo. To keep banks of all sizes solvent, to keep teachers working, to keep police and fireman on the job and to fix roads. There were no new jobs or industries created. When the money dried up so will the status quo.

[opihimoimoi]

34. Its the GOP who block new jobs being created....by being obstinate

[lib2DaBone]

35. The answer is simple.. everyone on DU knows the answer...

Q: "Why are corporations sending jobs overseas and driving America into the ground?"


A: Because they can. They have bought and paid for control of our lawmakers and CONgress.. no one dare point this out.. no one dare state the truth... we are living in a nation of corrupt Bankers who have sold our country for 7 pieces of Silver.

---------------------------------------

I could go into a rant on Derivatives, The FED, QE-2, Endless War, Greenspan, Bernake, Obama, Bush & Wall Street control of the White House... but why bother.. the above statement says it all...

[kestrel91316]

36. Because extremely wealthy people hire disproportionately fewer

employees than middle class people. And they are extremely averse to parting with any of their unearned dollars.

[madinmaryland]

39. Sheesh! Stop with the teabag meme that the Fed spent $12 trillion.

They many overnight loans that totaled $12 trillion.

And the stimulus was under $900 billion, which more than a third went to tax cuts and not actual stimulus. If they had actually provided a stimulus they really would have spent $3 trillion.

Un-recced.

[girl gone mad]

53. It was closer to 23 trillion in total

The "overnight loans" represented a very small part of it.

This graphic doesn't even include the tax forgiveness schemes, or POMO, or other various backstops.

[Festivito]

40. Here's six reasons. Need more?

Fewer working age,
no savings by or for retired,
no savings by or for health care for retired,
overpaying health care at 250% of what we should pay,
overpaying military costs (more than rest of world added together),
Factories gutted and innerds sold to other countries.

Do you need more than this? We'll work for lower wages rather than starve, we might even fight the corruption -- for a while.

[sendero]

41. Get used to it..

.. because Obama's doing nothing to change the dynamic that has taken hold.

Simply, there is no demand. There is no demand because people are broke. "Investors" do not invest in plant and labor when there is no demand for products or services.

It is a vicious circle and it is not going away soon, maybe not ever.

Adjust to the new reality because it is highly unlikely that you are going to change it.

[Tierra_y_Libertad]

43. We have a consumer economy with consumers who can't afford to consume.

[rurallib]

44. They have created jobs in China, India, VietNam

About 1.5 million.
Why is there no retribution for taking their jobs overseas?

[girl gone mad]

45. A good analogy...

from Max Keiser: Think of the water main bursting in your town. Your home might get flooded with water, but if you turned on your faucets, no water would come out.

The Fed flooded the markets with money, but it's all been pumped into speculative financial activities, which have been a net drain on the productive economy for decades now. Our government acted with reckless disregard when deciding to bail out the banks. Woulda, shoulda, coulda bailed out Main Street instead and put the banks back in their place.

[gulliver]

47. Missing animal spirits. No mutual trust. Anger. Fear.

That's my theory. People don't feel like buying or cooperating when they feel threatened, angry, and cheated. Bush and the GOP dealt heavily in those negative emotions for eight years. They made America an emotional basket case. That is the root cause of our problems now, IMO.

The old story of "stone soup" comes to mind. "Invert" that story, and you get a picture of what Bush and the GOP did to the country. Each person walks past the shared pot and takes a little out of it instead of putting something in.

I think our economy comes back when we start dealing in forgiveness, tolerance, generosity, trust, etc. I personally think we should bring back the WPA and things like that using an excise tax on the wealthy.

[WhiteTara]

49. the stimulus mostly went the wrong way

for which you can thank the republicons. And the part that went the right way was inadequate, for which you can also thank the republicons.

edited to add...

[rucky]

50. Why make and sell stuff when you can accumulate cash from investors

and use it to play the market?

[Trajan]

51. There are jobs - Overseas

Low wage types of jobs ...

Stimulus is great, when you have a 'fair wage' system that pays enough to buy the cars, houses, washers and dryers, computers, bikes, guitars etc etc that give other people good paying jobs ...

Low wages are the problem .... You want stimulus ? ... Pay families a fair price for their labor and they will spend it ...

[BzaDem]

54. There is one thing that will work and has been proven to work, but won't pass through Congress.

More stimulus spending with higher deficits.

After a recession (especially one following a financial crisis), consumers pull back. This causes businesses to fire people (due to lower demand for their products). But when businesses fire people, those people reduce their own spending, which lowers demand even further. Which causes more businesses to fire people. And on and on.

The only way to break the cycle is to actually break the cycle -- have government create demand from the deficit. Done in sufficient quantities, this causes businesses to rehire (due to increased demand), and this rehiring causes customers to spend more (creating more demand, which causes businesses to rehire more), etc.

We passed a stimulus, and the stimulus we passed was needed. But while it was the most that could get 60 votes, it wasn't enough from an economic perspective -- it actually was mostly canceled out by state government cutbacks.

Unfortunately, manufactured debt hysteria in this country causes some people to vote for Republicans, who will do exactly the opposite of what our economy needs each and every time.

[HughBeaumont]

55. A gerneal answer -

1. Wages haven't kept up with the cost of living since 1973 when measured in real dollars.
2. Service jobs generally don't pay as much as the manufacturing/industry jobs that left. What you're left with is a glut of educated workers earning peanuts in underemployment. This is also why there is no savings rate to speak of.
3. In 1969, the price of a home was about a 2:1 ratio over yearly income. Today, it's 3:1 - 6:1, which is another product of stagnant wages.
4. When you don't pay your workers, you have no demand and the corporatists don't care because THEY GOT THEIRS.
5. The Great Risk Shift (read the book, real eye opener), starting around the 1970s, where most of the burden (retirement, health care, education, etc) shifted from employer to employee.

http://journals.democraticunderground.com/HughBeaumont/139

[madokie]

57. Because the greedy bastids don't want that to happen just yet

they still have a cash cow to milk

[Poboy]

62. .

[eridani]

63. What happens in the game of Monopoly when one person gets all the money?

S/he wins, and the game is over. Want to keep playing? Take the money away from the winner, divide it up, and start another game.

[haele]

67. Wealthy investors don't need employees. Hedge fund companies only need a couple dozen employees.

Most wealthy people don't need to hire very many people because their wealth is coming from investments.
The companies that they are investing in need to cut down costs to increase profits. As labor is one of the most expensive costs, those companies that invite investors so they can do well on Wall Street find ways to reduce labor costs, which means replacing a full-time well paid labor force with machines (meaning those jobs are gone forever), contract inhouse labor out, reduce the workforce to part-time (reduced hours) or close up their US factories/offices and send that labor-intensive work overseas.
The top 1% wealthy don't really care, they don't get affected very much by "an economy". They've built up enough of a cocoon to protect them even if they were stupid enough to invest with scammers like Madoff. They've created their own reality, and that's where they live. Since very few of them started off in working class families, struggling to make a budget isn't really on their radar - they may have done so in or after college while they were starting out if their parents were "strict", but the idea of a family living in poverty in the US is as foriegn to them as the lifestyle of the average citizen of Outer Mongolia is to the average American. It's, like - TV.

The rest of the top 5%, the "rich" might care about jobs, as most of those are (or have been) the middle/upper management, actual business owners, independant contractors or in some sort of government job or profession where they actually labored for several years to get where they were themselves, and they live off an income which can be affected by economic ups and downs. But even then, a lot of their money tends to come from investments. Which leads back to Wall Street.

And back to my second and third sentances.
"The companies that they are investing in need to cut down costs to increase profits. As labor is one of the most expensive costs, those companies that invite investors so they can do well on Wall Street find ways to reduce labor costs, which means replacing a full-time well paid labor force with machines (meaning those jobs are gone forever), contract inhouse labor out, reduce the workforce to part-time (reduced hours) or close up their US factories/offices and send that labor-intensive work overseas."

Unless a company is owned by employees, or has strong employee or union representation in the management structure, it's in the interest of a company's investors and management to cut down on costs. Which means, fewer jobs and lower wages.

The Economy that is considered the "bellweather" or most important economic area in the US - The "Wall Street/Corporate Investor's Economy" does not need jobs.

Because a CEO or a successful investment firm doesn't care about Joe and Jane Workers, busting their butts for $18 an hour with bennies in New York.
Once their production capability drops below their their profitiablity, just get rid of them, move the plant to Georgia, and hire Sam and Sally to take their place for $10 an hour and half the benefits. And when they've worked too long and are starting to get too expensive - or too uppity - well, you know. Luaing and Luan can take their place in the Marianas for seven cents an hour, and the company can still used the "Proudly Made in America" label and get the American Business tax breaks...
As for administration - heck, get an Automated or outsourced office system, and you can drop an Operations and Administration department from 50 people down to the three upper level managers to handle the contracts and their receptionists.
And so it goes...

The economy of a Nation is not the same as the economy of a corporation or business, nor is it the same as a household economy.
The problem we are in now is because too many people think the US should be run like a corporation.
Unfortunatly, if you want to live in a country that is run like a Corporation, then expect a country that "pink slips" it's citizens on a regular basis while it gives bonuses to those in charge for "cost effectiveness".

Where those pink-slipped citizens are expected to go, I have no idea.

Haele