Job Creation 101

Posted on October 12, 2009. Filed under: America | Tags: , , , , , |

A hiring tax credit returns from the dead.

The White House is finally coming to realize that taxes affect job creation. Terrific. Its solution seems to be to bribe employers for hiring new workers, albeit only for a couple of years. Less than terrific.

Alarmed by the rising jobless rate, Democrats are scrambling to “do something” to create jobs. You may have thought that was supposed to be the point of February’s $780 billion stimulus plan, and indeed it was. White House economists Christina Romer and Jared Bernstein estimated at the time that the spending blowout would keep the jobless rate below 8%.

The nearby chart compares the job estimates the two economists used to help sell the stimulus to the American public to the actual jobless rate so far this year. The current rate is 9.8% and is expected to rise or stay high well into the election year of 2010. Rarely in politics do we get such a clear and rapid illustration of a policy failure.

This explains why political panic is beginning to set in, and various panicky ideas to create more jobs are suddenly in play. The New York Times reports that one plan would grant a $3,000 tax credit to employers for each new hire in 2010. Under another, two-year plan, employers would receive a credit in the first year equal to 15.3% of the cost of adding a new worker, an amount that would be reduced to 10.2% in the second year and then phased out entirely. Why 15.3%? Presumably because that’s roughly the cost of the payroll tax burden to hire a new worker.

The irony of this is remarkable, considering the costs that Democrats are busy imposing on job creation. Congress raised the minimum wage again in July, a direct slam at low-skilled and young workers. The black teen jobless rate has since climbed to 50.4% from 39.2% in two months. Congress is also moving ahead with a mountain of new mandates, from mandatory paid leave to the House’s health-care payroll surtax of 5.4%. All of these policy changes give pause to employers as they contemplate the cost of new hires—a reality that Democrats are tacitly admitting as they now plot to find ways to offset those higher costs.

Alas, their new ideas are little more than political gimmicks that aren’t likely to result in many new jobs. Congress doesn’t want to give up revenue for very long, so it would make the tax credits temporary. Thus anyone who is hired would have to be productive enough to justify the wage or salary after the tax-credit expires—or else the job is likely to end. An employer would be better off hiring a temp worker and saving on the benefits for the same couple of years. read the rest in opinion Wall Street Journal

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ACORN Plans Massive Layoffs!

Posted on October 5, 2009. Filed under: Acorn | Tags: , , , , |

by Matthew Vadum

A credible source claims the embattled left-wing advocacy group ACORN is poised to announce massive staff layoffs but an ACORN spokesman denies this is the case.

A credible source close to the Association of Community Organizations for Reform Now revealed that the activist network intends to lay off all staff members operating out of its New Orleans headquarters. All information provided by the source to this reporter in the past has turned out to be correct.

However, ACORN spokesman Scott Levenson of the public relations firm The Advance Group in New York City said the source was incorrect.

In an interview Friday afternoon with Levenson said (referring to BigGovernment.com), “You guys just can’t get it right. You’re wrong again.”

When pressed to elaborate, Levenson declined to do so.

Levenson received media attention earlier this year when Fox News host Glenn Beck ejected the combative publicist from his studio during a commercial break. Beck said at the time that Levenson accused him of being a racist.

My source said that one of the employees to be cashiered in the Crescent City is the daughter of disgraced ACORN founder Wade Rathke. Rathke’s wife, Beth Butler, also works for ACORN but it is unclear at this point if she too will be laid off. Rathke’s son also reportedly is employed by ACORN.

ACORN also plans to lay off two-thirds of its Washington, D.C., staffers as soon as Wednesday of next week, according to the source. Layoffs will also extend to ACORN’s affiliate the ACORN Institute.

The source also revealed that all or most of ACORN’s development staff in the group’s New York City office will soon be laid off if they haven’ been laid off already.

Read more at BigGovernment.com

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Jobless rate reaches 9.8 percent in September

Posted on October 2, 2009. Filed under: Labor | Tags: , , , , |

By Christopher S. Rugaber, AP Economics Writer

Unemployment rate rises to 9.8 percent in September, as employers cut 263,000 jobs

WASHINGTON (AP) — The U.S. unemployment rate rose to 9.8 percent in September, the highest since June 1983, as employers cut far more jobs than expected.

The report shows that the worst recession since the 1930s is still inflicting widespread pain and underscores one of the biggest threats to the nascent economic recovery: that consumers, worried about job losses and stagnant wages, will restrain spending. Consumer spending accounts for about 70 percent of America’s economy.

Most analysts expect the economy to continue to improve, but at a slow, uneven pace. Government stimulus efforts, such as the Cash for Clunkers auto rebates, likely boosted the economy in the July-September quarter, but economists worry that growth will slow once the impact of such programs fades.

“Consumers … are going to struggle to increase their income,” said Brian Fabbri, North American chief economist for BNP Paribas. “If they’re struggling, they’re not consuming. That just takes some of the legs out of recovery.”

The Labor Department said Friday that the U.S. economy lost a net total of 263,000 jobs last month, from a downwardly revised 201,000 in August. That’s worse than Wall Street economists’ expectations of 180,000 job losses, according to a survey by Thomson Reuters.

The unemployment rate rose from 9.7 percent in August, matching expectations.

If laid-off workers who have settled for part-time work or have given up looking for new jobs are included, the unemployment rate rose to 17 percent, the highest on records dating from 1994.

Read More at Yahoo Finance

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