New Ventures Society


The root causes for the lack of jobs in American fall in 5 categories Innovation, Corporate outsourcing, Corporate tax avoidance, Government allowing a massive influx of foreigners (both illegal and legal), and We ourselves.

In earliest America we had weaving machines and farm improvements such as harvesters and threshers. This eliminated the need for a lot of workers; which was nice since there was an extreme shortage of hired labor. With the new machinery a farmer could handle a much bigger area and not need helpers. So the immigrants came over, and instead of becoming hired hands they built their own farms -- land was free for the taking in the West. When we filled up all the farmland we effectively hit a brick wall. We banned Chinese immigration in the 1880s and the workers had to find jobs in the new mills and factories.  When the factory jobs reached capacity around 1920 we pretty much closed all immigration. But innovation continued full speed ahead, so the workers had to shift. The farmers were pushed off the land into the new factories and the productivity of the factories increased.  A steel mill today only requires 1/10 the workers of a century ago. As long as everyone is employed a rising productivity is ideal. But higher productivity means someone is no longer needed in a business if the total production is constant. Today the computer attacks the middle class jobs, rendering middle managers  redundant. The new developments in robotics will eliminate most minimum wage jobs.  If the workers are earning $20,000 a year and demanding $30,000 ( $15 an hour) and the work can be done by a computer and robot that costs $20,000 and $2,000 maintenance a year the business choice is obvious. Let the worker quit and buy a robot. It is forecast that 47% of the jobs can be replaced by robots in 10 years.

Outsourcing work to foreign lands is nothing new. During the California gold rush the miners would ship their dirty laundry to China to get cleaned. Today however bankers point out that corporations can earn more money by moving the factories abroad and firing the American workers. Walmart has an interesting history in this regard. While Sam was alive he had a program that encouraged made in the US production, but with his death and the takeover by the bankers and MBAs each company is pressed for the lowest price and prompted to relocate production to China. With this outsourcing there is also a lowering of quality. The borosilicate glassware that Pyrex developed was great for chemists and housewares. Today it is made in China using a different composition, so a housewife has to worry about her dish exploding in the microwave. To say nothing of the poisonous dog food and baby food China produces.

In addition to moving production abroad companies have been hiding money in foreign subsidiaries to avoid taxes. If you or I , as individuals, owned a corporation in a foreign country we would have to include the net income of the company on our personal tax return even though the money stayed overseas. A corporation is allowed to hide the income and only pay taxes if and when the money is brought back to America. By rigging the books to hold Intellectual Property oversees they are able to shift profits out of high tax area like the US into countries where no taxes are paid. Currently US companies are hiding $2.1 TRILLION in untaxed profits oversees with no intent to ever bring it back. (actually the money has returned. The foreign subsidiaries  just loan the money to the Home Office, and everyone is happy except the IRS.)

Using the average $50,000 capital cost for creating a job (as compared to projected cost of $250,000 if created from government stimulus plans) this means that 40 million jobs
could be created if the money were brought back. (there are only 6 million on unemployment, 3 million not collecting and 93 million not even looking for work) The 93 million figure is sort of fuzzy since it counts everyone over 16 not working, thus problems with students in high school or college, some retirees, and housewives taking care of the family. But still 40 million jobs (even minimum wage) would take care of a lot of financial problems. (Not that corporations will use the money to create jobs. They tend to
prefer to gamble with the money on the "risk free" financial inventions of the Bankers, such as Liar loans on houses and autos)

The Executive Branch is not enforcing the existing immigration laws. Over 11 million illegal immigrants ( The Mexican Government says 30 million) have been encouraged to slip across the borders, and take the jobs that teenagers used to assume to learn the employment skills they need. When was the last time you ever saw an American teenager earning money doing yard work or serving at a fast food shop. The total number of jobs created in the last decade (mostly minimum wage) are much less than the current influx of illegals much less the population increase from American teens growing up. To add insult to injury the higher wage jobs in IT are being replaced by Indians on temporary H1B visas because "there are not enough skilled American workers". Tell that to the folks at Disney and Southern California Electric who were given pink slips and told to train their Indian replacements. But this is all part of the revision to the immigration laws passed in 1965. The aim was to diversify America, replace the 90% white 10% Black population culture with one where everyone was a minority by passing out Green Cards to over a million a year of the most ignorant Third World populations who immediately go on welfare.

And finally, as Pogo says "We have met the enemy and he is us"
Over 50% of the jobs in America are created by the small businessmen. But trends in entrepreneurial drive have varied recently. A recent survey of Millennials says 60% want to be entrepreneurs. No more big business for them. But something has slipped between desire and execution. For the last 8 years we have for the first time experienced more companies being closed than being formed. We are just not creating new firms. Likewise over that period the percentage of individuals under 30 who own all or part of a small
business has fallen from a rather constant 8 percent of the population to only 2%. A drop of 75% in small business ownership portends dire numbers for the half of the population employed by small businesses. Why this is happening is one of those social question from social sciences,

No money because of student loans (the average net worth has taken a big hit for this age group),

Too much government interference (think of all the lemonade stands shut down by zealous government workers),

Scared to take risks (parents being arrested for letting kids play outside unsupervised)?

Whatever the reason, we are at the beginning of a major sea change in the demographics.