How many jobs do we want to see?
ADP showed 208,000 new jobs yesterday and 238,000 are expected to be added in the Non-Farm Payroll Report this morning but ADP also revised August 6% higher, which would add 20,000 more jobs to NFP. Interestingly, in ADP, small cap companies added half the workers – the Fed’s massive tightening program does not seem to be slowing them down.
The Fed wants no growth as there are already 10.2M unfilled jobs in the US so creating more net job openings seems just silly but shrinking the economy until we ERASE 10.2M jobs is just as silly – what makes sense is to supply 10.2M workers but that would require allowing immigrants back into the country (legally) along with job training and strategies to help people back into the workforce like Child Care Benefits, After-School Programs, Housing Assistance (so people can move to where the jobs are), etc.
Let’s say we let 500,000 people per quarter into the country on the condition that they have a job waiting for them. Certainly our Corporate Masters, who already have 160M workers and replace 16M of them each year (4M per quarter) can manage to interview people who aren’t yet in the country and sponsor them into the US workforce. There’s 2M jobs filled next year.
We have 160M people who don’t work in this country and half of them are too young, too old or not able to work but the other half (80M) are able to work but half of those are working as mothers or housewives.
I’m not sure what it would take the Real Housewives of America to be motivated to work but for a good half of the stay-at-home Moms (20M), DAYCARE is the answer! Simply providing daycare for, statistically 30M children, would allow 20M Moms to fill those unfilled jobs. Daycare costs a family (1.5 children) $400/week so $1,600 per month to care for your child while you work and then Mom needs a car, gas, clothing, etc to go to a $40,000 job where she takes home $25,000 and nets ZERO – this is why 40M skilled, educated women are at home taking care of their kids instead of working.
If the Government took care of it, it should be cheaper, as we school children for $7,500 per student per year – about 40% of what it costs for private child-care. That would cost taxpayers $225Bn a year but 20M women making $40,000 and paying $15,000 in taxes would generate $300Bn a year in tax revenues AND is would pump ($25,000 x 20M) $500Bn into the economy AND it would help to alleviate poverty and take families off other forms of assistance.
Most importantly, it would eliminate the labor shortages and bring down wage pressures (more labor supply) and allow millions of families to catch up on their debt and maybe (gasp!) even save for retirement (not to mention adding 20M payers to the Social Security system to shore it up).
Instead, the Fed’s “solution” is to SHRINK the economy by $500Bn so the jobs are no longer required. How moronic is that? That sacrifices current and future growth when there are other alternatives that can provide healthy growth. Government is surely broken that we allow this to happen – our moral code is also surely broken that we allow this to happen…
Typical 2-year-olds in Denmark attend child care during the day, where they are guaranteed a spot, and their parents pay no more than 25 percent of the cost. That guaranteed spot will remain until the children are in after-school care at age 10. If their parents choose to stay home or hire a nanny, the government helps pay for that, too.
In Germany, children can attend forms of “kita” from early months through elementary school. In some places, parents pay tuition based on their income, and in others, including Berlin and Hamburg, it is free. In France, parents of babies and toddlers receive tax credits of up to 85 percent of the cost of attending child care centers called crèches or hiring home-based “childminders,” before public preschool begins at age 2 or 3.
The US is barbaric by comparison. And what is the end result? Poor children go into Kindergarten with 2 years less education and socialization than their peers who went to day care and they spend the next few years catching up – how is that equal opportunity?
Anyway, it’s 8:30 now and, as we thought, the NFP report came in hot at 263,000 and that’s down from 315,000 last month but not down enough to take the Fed off the table so the markets are diving back to the week’s lows because the Fed wants less jobs and a slower economy, not more jobs and a healthy economy. MADNESS!!!
The funny thing is they can’t win. The economy is too strong and wages are rising and there are 10.5M (now) job openings that leave employers in a bidding war for more workers. The Fed thinks they can quell that demand by making it too expensive to borrow, which should slow growth but inflation suggests there is still lots of money sloshing around – so it will take a very long time to win the war that way.
I say, why not let people fill those 10M jobs and they will then create more goods and services so we don’t have too much money chasing not enough goods – which causes inflation (Econ 101) as well as those 10M workers at $40,000 sucking up $400Bn of those loose Dollars in wages – $150Bn of which goes towards taxes to pay down the debt.
These are not unsolvable problems – we just need the “leaders” of this country to start doing things that actually benefit this country.
Have a great weekend,
– Phil
