Posted on 01/14/2004 12:10:19 PM PST by .cnI redruM
Edited on 04/29/2004 2:03:42 AM PDT by Jim Robinson. [history]
NEW YORK (CNN/Money) - The buzz on Wall Street is that, thanks to generous corporate tax incentives, boatloads of cash are scudding toward technology firms in 2004. But here's a case where tech may not be the biggest winner.
Back in May, in its effort to juice an economy that was still shedding jobs, Congress upped the first-year depreciation allowance businesses can write off on new capital investments to 50 percent from the 30 percent allowance enacted following Sept. 11. But this "bonus depreciation," as it is called, sunsets at the end of the year.
(Excerpt) Read more at money.cnn.com ...
I get a kick out of the leftist presses use of the term "jobless". The jobless rate now stands at around 5.9% if I'm not mistaken. That is a mere 0.9% higher than the 5% number that used to be considered "full employment".
5% unemployment is considered "full enployment" because at any given time there is approximately 5% "churn" in the job market - people moving from job to job, people starting changing careers, educational leave and similar events.
When your this close to full employment, it gets harder and harder to acheive the next 0.1% drop - because the pool of workers to select from is less and less highly qualified. Said another way - the good ones are hired first!
Generally true -- but not always. Sometimes you have an area like IT where the goal for the past couple years has been to hire the cheapest, not the best. I was just talking with a guy who, with 3 others, made the final round in an interview for a 1 year contract position. He was offering to work for $60/hr (average for his years and experience, although I know from personal experience he is WAY better than average). The company then pulled a "reverse bid" auction on the 4 candidates to see who would go for the job the cheapest. He dropped out immediately (he doesn't need to work for less than his stated rate). The guy that took the job agreed to do it for $36/hour.
Now you may say, fine, the free market at work. But, in reality, they took the "low-bid" candidate. Anyone who has ever been involved in a low-bid deal knows you almost always get the absolute worst candidate with the highest risk. In this case, they got the 1 candidate in 4 who didn't believe that he could get more money - in other words, the worst of the lot. Plus - these contracts are not truly 2 way binding contracts. The guy they hired could walk in a month, or 2 months, as soon as he finds something that pays more -- and they will have to do the whole process over again.
So -- sometimes -- the good ones are NOT hired first. And everyone loses. The company, because they got the lowest skilled, highest risk candidate. The other candidates, because they wasted their time (although they now know a company to never trust again, and believe me, they pass the word around!). And finally, the shmo that got the job -- because he knows he took the job at a rate that the other guys walked away from. Odds on him immediately looking for other opportunities while "working" for this company? Very high.
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