We keep hearing we have a “Jobs Problem” in America. 9+% unemployment sure would indicate that fact. All I hear on the news is companies are not hiring. However, I would contend that we actually have an “Entitlement” and “Training” problem in America, not a Jobs Problem.
Why would I say such a thing? I have no desire to offend anyone who is unemployed and really looking for work. We all know we have had a bad recession; many people have lost their job and cannot find work. However, we have over 15 positions that are available to be filled at Blytheco. We have spent over $100,000 on recruiting fees to fill positions this year alone. We have jobs; we pay a fair wage for services provided. We are a stable company, have been in business for 31 years and are the top company in our industry. So, what is the disconnect between high unemployment and unable to hire staff? Why can we not find qualified workers at a fair compensation level and yet we have 9+% unemployment in this country. I would suggest that the jobs problem is really a lack of skilled labor to match the needs of employer’s problem.
We could write a book on the issues with education and preparing our children for the job market. Training people to meet the needs of employers is the key to reducing unemployment. There are hundreds of thousands of available jobs. The issue is matching an open job with a required skill set. If we have a labor force that is not trained to meet the needs of an employer, how can we get them trained? Trained employees are a benefit for employers, they are off the social programs and they are paying taxes. Since they would be productive, they would spend more – all of which is a positive cycle that adds additional growth and jobs to the economy.
What should be done?
1) Create programs where employers can get credits for training unemployed into new jobs with new skills.
2) Create job training centers that focus on job skills employers need today.
3) Require training for anyone on entitlement programs.
So, let’s look at the entitlement issues. During the Boom times prior to 2008 there were significant compensation increases for skilled labor. The recession hit in 2008 and companies cut back via terminations and Reductions in Force (RIFs) and/or requested compensation concessions with their staff to save jobs (salary reductions, reducing benefits, dropping 401(k) matches, etc.) Sure, we all thought recession would last for a year or two and we would be back to the growth years again. Well that did not happen, as we all know.
However when this recession hit, I saw a significantly different reaction than I had seen in other recessions over the last 31 years I have owned my business. Like other businesses, Blytheco cut back on less essential personnel. We cut some dead wood / duplicate or less productive staff, etc. However we were still hiring other skilled labor – sales, marketing and consulting personnel. You would think that if you were out of work you would want to get back into the job market as soon as you could. But, what I saw was a different response.
First, there was an entitlement attitude among job candidates that any new job had to be as good as or better than the job they just got fired from (with better or same compensation, benefits, etc.) No one was willing to give up anything in this down time, even to get a job in those tough times. Well, that became a real dilemma; we were unable to pay premium wages for new staff when we had just let staff go in other areas due to uncertainty and the economic down turn.
So, I started asking why? The answers shocked me at the time but are also becoming more prevalent. The most common answers were:
- “I worked my butt of for the last x years and I do not want to go backwards in my compensation. “
- “I am in no hurry, I think I will take the summer off and spend it with my family / kids.”
- “This is a good time for me to try and open my own business – or figure out what I want to do in the future.”
When I asked what they were going to do for income, I got some interesting answers as well. Some said they “had some money tucked away from the good times,” some had a “spouse that was working and they could make do.” But the majority told me that they had figured out that the money they would get from unemployment was enough for them to live on especially since they would not have to commute, cover general costs of working (clothes, lunch out, etc.) and they could save on the cost of daycare, household help, etc. Some even said they would have MORE disposable income from unemployment.
Ouch!! And we wonder why almost 50% of America does not pay taxes. I guess I have it all wrong. The state and federal governments were extending unemployment benefits for the unemployed that actually encouraged them to stay unemployed. Also, employers were required to extend COBRA benefits and cover the insurance costs for the unemployed that did not want to find work because it interfered with their home-life balance.
I also began observing individuals ignoring foundation expenses like mortgage payments because they were upside down. However, at the same time these individuals were upgrading their five year-old 55” plasma for a new 3D model while collecting unemployment and free health insurance and taking their kids to Disneyland or multiple week vacations.
Do not get me wrong. I do a lot of charity work. I am always willing to give a helping hand. However, when a helping hand becomes a hand out and that hand out becomes an entitlement – it crosses the line for me.
I would never think of taking unemployment, food stamps or other assistance if I still had money in the bank. I always looked at these programs as ways to help people that were down on their luck but working to get back on their feet. But, I get that most people will take advantage of what is offered to them. So, today government is bleeding cash with all these programs and cannot balance the budget. Here are a few recommendations from me to reduce entitlements and get people back to work.
1) Drug test anyone on a social program (welfare, unemployment, food stamps, etc.). If they have enough extra money to spend on drugs, it should not come out of the taxpayer’s pocket. If they test positive, they have to attend a drug counseling program weekly to get any assistance. No show or test positive multiple times and you are out.
2) Limit unemployment to a reasonable period of time. Have the payments reduced to zero as time goes along. The longer you are out of work, the less financial support provided. That may encourage fewer ‘paid vacations’ and encourage them to take any job instead of waiting for the perfect job. Why do we encourage people to play the system until the last day that the system will pay? Require unemployed to actually look for work. Require an endorsement from companies they interviewed with.
3) Limit welfare to a reasonable period of time and a reasonable level of dependents. Have the payments reduced as time goes along. The longer you are in the program the less support provided. Why do we pay welfare mothers more for having more kids? After two, there should be no extra payments. That may encourage them to take any job instead of waiting for the perfect job or just living off the system.
4) Require training or social service work for anyone on unemployment or welfare. If you want a check, then you need to be learning a new skill or providing something back to the community that is paying you. Pick up trash, volunteer at the homeless shelter or community center, construct low income housing, etc. Something to give back for what they are getting. They get credits for services provided. Credits are required for a check.
5) These Credits can be provided via existing nonprofit organizations. There is no need to expand government involvement. Credits can be posted to their accounts from the sponsoring organization electronically over the web. The social programs then only pay if they meet the program requirements and they have ‘Credits’ on file.
So, that just a few of my thoughts on how to remove people from the government dole and get them back to work. I would be interested in your ideas of how we could reduce entitlements to people that do not deserve or need them and encourage people to work for a living instead of taking a hand out.