Our Chronic Unemployment Problem

by Bill Bosco

Bill Bosco is the principal of Leasing 101, a lease consulting company. Bill has over 37 years of experience in the leasing industry. His areas of expertise are accounting, tax, financial analysis, structuring, pricing and training. Bosco has been on the ELFA accounting committee since 1988 and was chairman for 10 years. He is a frequent author and speaker on leasing topics. He has been selected to the FASB/IASB Lease Project working group. He can be reached at wbleasing101@aol.com, www.leasing-101.com or 914-522-3233.

Principal of Leasing 101 Bill Bosco offers solutions to the chronic unemployment problem facing the U.S.

Although the official unemployment rate is 5.6%, it is a misleading number. The labor participation rate (the percentage of working aged people who are working or looking for work) is at 62.8%, meaning over 92 million working-aged people are not looking for work. This is not a cyclical problem. Stats say we are out of the recession, but there have been several permanent changes in the work environment in the U.S. that our government has to start dealing with. It is the government’s responsibility to create the right environment for working-aged people to get decent jobs.

What are the issues and solutions?

First, globalization has allowed businesses to fine the lowest cost country for manufacturing products. This has sucked jobs out of the U.S.

The solutions? Create the lowest cost business environment – specifically reduce U.S. corporate tax rates and taxes and expand our oil and gas production to cut U.S. energy costs.

Second, the new business environment with technology advances means that the well paying jobs go to those who are educated and trained for the new jobs. That is not just computer programming jobs, but it is jobs that require abilities to operate computers, operate medical equipment, provide services where there is interface with the public, and the building/construction trades to name a few.

The solutions? We have to make sure colleges and technical/trade schools are producing employable graduates. The government has to stop giving (and forgiving) low cost student loans which enable institutions to charge exorbitant tuition, yet they do not give graduates what they need to earn the money to pay for it.

Last, there is a much higher cost of living considering what the public feels is the base line for an acceptable life — that is, it seems that all must have a smart cell phone, cable service for TV and internet, large screen TV, video games systems, leased new car, air conditioning, Starbucks lattes, computer tablets for each person in the family, etc.

The solutions? We do need higher paying jobs and we might have to legislate that through a higher minimum wage coupled with limits on executive pay. We also need to cut the entitlements to make people have to work harder to increase their earnings and create the lowest cost manufacturing environment with the best trained and prepared workers.

What do you think?

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