US Unemployment

TV news today said the Obama Administration is disappointed with the previous stimulus packages having had on reducing unemployment. The unemployment rate is almost 10% and trending up. The Obama Administration had expected the stimulus packages to reduce it to 8%. Therefore, the Administration is considering another stimulus package.

In a capitalistic society, industry and commerce have traditionally made the jobs. Government employment has been small by comparison. While we may be on the verge of socialism/capitalism, the bulk of our economy is still capitalistic. Therefore, we need to look at the private sector for any significant job improvement.

For 60 years, government administrations and legislatures at federal, state, and municipal levels have continued to pass restrictive rules and regulations against business management. During that time, there has been no effort to reduce such rules and regulations in order to encourage business development and its associated hiring of employees. We have now reached a stage where private capital has little to no incentive to engage in business activity, because of the hassle that is involved in so doing, without likelihood of significant profit. If we want to reduce unemployment, now is the time to do an about-face with respect to government attitude toward business. It is time to strengthen the goose that lays the golden eggs, rather allow it to remain in a weakened condition.

An organization known as the World Bank Group (http://www.doingbusiness.org/economyrankings/) ranks all significant countries of the world in their ease to do business. The ratings are by point score, with the best being a minimum number of points. The United States ranks fourth, behind Singapore, New Zealand, and China/Hong Kong. The position of the United States is comparatively pretty good. Total ratings are based on minimum point scores in 10 categories. They are: Starting a business; Dealing with construction permits; Employing workers; Registering property; Getting credit; Protecting investors; Paying taxes; Trading across borders; Enforcing contracts; and Closing a business.

Remembering that 1 is best in the point system, the United States has 61 points on Paying taxes, 25 points on Dealing with construction permits, 18 points on Trading across borders, 15 points on Closing a business, and 12 points on Registering property. Other countries have ratings as well as 1 in those categories. These would be the areas to concentrate on, with respect to reducing restrictions and regulations at all levels of government.

Simultaneously, it must be remembered that these are comparative figures and even though the United States may have a low point score in some areas, such as Employing workers, there is still room for improvement, as we concentrate on reducing unemployment. This might involve: 1.) Eliminate government programs promoting unions, 2.) Reduce the minimum wage from the present $7.25 per hour to the previous $6.55 per hour, 3.) Avoid imposing any business requirement to supply health care or health care insurance to its employees.

A monetary stimulus package will likely do nothing to reduce unemployment, as we have seen with previous monetary stimulus packages. The stimulus package that will do the job will be a combination of reduced restrictions on US business operations.