The Economy Needs More Workers; Trump's Budget Cuts Would Produce Them

Investor's Business Daily ^ | 5/22/2017 | Staff

[IBD editorial writer]

Growth: Economists are saying that a big problem the economy faces right now is a lack of available workers. If that's the case, then the welfare reforms in President Trump's budget would be a big part of the solution.

A front-page New York Times article Sunday says that "the main economic concern" these days "is no longer a lack of jobs, but a lack of workers." The Times reports that almost a third of the 388 metropolitan areas tracked by the Bureau of Labor Statistics have an unemployment rate below 4%.

As a result, the story goes on, there's little chance that the economy could grow significantly faster, despite Trump's promises.

But as we've pointed out in this space, the economy isn't anywhere near full employment, given that the labor participation rate today is 62.9%, which is down from 66% before the last recession started in December 2007.

[Alberta's Child]

The underlying problem is companies refusing to pay the going rate.

Please define the "going rate" for me.

[central_va]

The going rate is the wage where you begin to get the quality of people/candidates you desire. The goal for the employer is to find out what that is, not me. I do not live in New Jersey but I’ll bet at $100/hr you’d get all you wanted. Of course $100/hr is unreasonable but what I suggest is a realistic range. If $20.00/hr is not getting it done. Try $25.00/hr. Or just go out of business.

[Alberta's Child]

The problem with large-scale manufacturing is that the "going rate" for labor will vary widely by geography, but the "going rate" for the product you're producing will not. See below for a perfect example of this:

If $20.00/hr is not getting it done. Try $25.00/hr. Or just go out of business.

Or close the plant and move your production somewhere else.

[central_va]

Or close the plant and move your production somewhere else.

As long as they move within the USA I have no problem. They go overseas and their product should be subject to steep import tariffs.

[John O]

What you say is true if we do it all at once (Unless we can get it done instantly immediately after an election and started with a huge numerical advantage in the senate)

So we’d have to chip away a little at a time. Cutting welfare can be done. slick willie clinton did it for one.

[John O]

There is a certain value to work. Flipping burgers will never be more than a minimum wage job for example.

If the locality does not have enough people willing to work for the wage that the work is worth (because the local welfare system is way too generous) then the company is forced to move and take ALL it’s jobs with it. Let the New Jerseyites starve if they won’t work.

Now I understand the Ohioans refusing to move to New Jersey. I wouldn’t move there either. Quality of life would suck (With few exceptions every part of jersey I have seen is a hellhole)

[Oatka]

I find it hard to believe that people on welfare by choice are candidates for even the most menial jobs out there, much less the kind of job that requires any education.

Back when was I was commenting against NAFTA in the Macon Telegraph's (GA) LettersToTheEd section, one small manufacturer called me up and invited me over for a discussion about his various experiences.

One of them was a state subsidy (GA) for him to hire those on welfare - all blacks. "Biggest mistake I ever made" he told me. These "new hires" were SO pist off at having to work, they sabotaged his machinery, whose replacement/repairs cost him far more that the subsidy paid him. These people were all gone within a month. Not a damn one of them was any good.