Eliminate the Job Burden

At the request of the Joint Select Committee, on October 5th, 2011 we passed them our thoughts on the Job Burden.

Eliminate the US Job Burden:

It costs more to create and maintain private sector jobs in the US than it does in any other country. We will continue to lose our best paying private sector jobs to the rest of the global economy until we recognize and correct this job killing and economy killing imbalance.

In this highly competitive global economy, our laws, regulations, taxes and policies have made it increasingly less profitable for employers to create jobs in America than in other countries. The unintended consequences of these actions have been to force investors, entrepreneurs and businesses both large and small to take their capital and their jobs and go elsewhere, and they have – in droves.  To reverse that trend and once again foster U.S. based private sector job creation, Americans must seek out and remove the roadblocks that impede U.S. based employer profitability. We refer to the collection of impediments that inhibit employer profitability, and thereby restrict job creation, as the Job Burden.

We propose that America begin her economic recovery by reversing the forty-year journey that has forced American employers to pay for our nation’s historic social ills and economic inequities at the expense of our jobs. The unintended consequences of these policies have been to undermine the very business climate that was responsible for elevating America to lone economic superpower status and producing the highest standard of living the world has ever known. We argue that by continuously increasing non-business related costs on our job creators, we have forced them to take their capital and their jobs to friendlier shores. We show that by burdening our employers with a host of social safety-net costs, uncompetitive government regulations and the world’s highest business tax structure, the once most job-welcoming nation in history has deteriorated into one of the most job unfriendly counties in the world.

We use Bureau of Labor Statistics data to quantify several of the safety-net programs that contribute to the U.S. job burden. Our analysis reveals that safety-net costs such as Social Security, Medicare, Medicaid, employer-based healthcare, and pension plans add 30% to the cost of U.S. manufacturing labor. A thirty percent labor premium is an unsustainable handicap for American based employers to overcome in an ever-growing global economy that continuously improves in production quality, process efficiency and the education of its labor force. To add insult to injury; we reveal that consumers and not businesses actually pay for these programs by way of increased prices. The sad irony is that the increased prices merely make American made goods less competitive, which costs us our jobs and puts our safety net programs at risk.

While we condemn the job-killing aspects of the job burden, we underscore the critical importance that our safety-net programs have on American society, however; we demonstrate that funding our safety net programs through our businesses not only destroys our jobs but consequently places our job-funded safety-net programs at risk. Keeping both our safety-net programs and our jobs requires an alternate means of funding our safety-net programs. We recommend we address that dilemma through a revenue-neutral National Retail Sales Tax that we have named the Safety-Net Tax. The Safety-Net Tax not only frees U.S. employers from the job-killing ravages of the job burden, but since it allows improvements to overall business efficiency, it will reduce aggregate costs (prices + Taxes) to consumers and taxpayers. All Job Burden costs are passed along to consumers and as such are regressive in that the poor pay a higher percentage of their wages for Job Burden costs then do more affluent consumers.

In any free-market economy, profitable, private businesses are the only economic growth engine we have. The jobs those profitable businesses produce are the most effective way for Americans to contribute to and benefit from that growth engine. In this global economy, American labor must unite and commit to winning the global competition for jobs. American workers must provide employers, both foreign and domestic with reasons to invest their capital in America and create their jobs in America. As a labor force, America must structure an approach designed to entice employers to bring their jobs here not punish them with costs and regulations that reduce their profits and inhibit their success. American labor must assume responsibility for restoring America to the most job friendly country in the world. Our politicians, labor unions, press and special interest groups must unite behind this American self-interest objective. The only way to “jobs-jobs-jobs” is to help business and capital be more profitable here than anywhere else. Americans must demand that our political, business and labor leadership reject the economic destructive strategies that pit labor against business for the purposes of advancing parochial self-serving interests.

Eliminating the Job Burden does not mean we have to relinquish the gains made by organized labor. On the contrary, the AUP wants to protect and even enhance the quality of work-life gains that organized labor has achieved over the years. In fact, we want to take it a step further. We want all Americans, not just a select few, to benefit from the benefits and protections forged by organized labor. Our philosophy in this regard is simple: As a nation, we can have any safety-net program, benefit plan or quality of work-life standard we want! All we have to do is pay for it! And, equally important, we must guard against attempts by our politicians and special interest groups to hide or postpone the costs of our programs in various tax and debt schemes that eventually come back to bite us and put our nation’s financial future at risk.

What we have to do is stop pretending that our businesses pay for any of our safety-net programs – they do not. "There is no free lunch". We must recognize that we pay for them as consumers, taxpayers and employees. Once we realize this fundamental economic truth, we can free our businesses from the job burden, which will allow business to create American based jobs as we continue to pay for our safety-net programs through our purchases.

One way to portray private sector job creators is to compare them to the fabled “Goose that lays the golden eggs”. While the job creators symbolize the goose, the golden eggs denote the jobs they create. Until we unshackle our employers from uncompetitive, non-product related costs, the United States will continue to hemorrhage jobs and industries to the rest of the global economy. It is a simple formula: The more we ask our businesses to pay for our social programs and other non-business related costs, the more jobs we will lose to foreign competitors who are eager to keep their costs down and take our jobs. In essence, we are purposefully killing the goose that lays the golden eggs. Why? Consider recent Congressional actions either passed into law or pending Congressional action e.g. PPACA (Obama Care), Cap & Trade, Financial Regulations. Each of these programs adds to the job burden and will no doubt force more jobs overseas. The question that every American should ask is “why is Congress killing the goose that lays the golden eggs?” Attempts by some in Congress to “shame” American business leaders who outsource or relocate to less costly shores as “un-American” are ridiculous demagoguery. By definition, capital must follow the path of least resistance or risk being lost. It would be a violation of a business leader’s fiduciary responsibility not to do everything in their power to maximize the return on any owner’s capital investment, even if that means going offshore. It is the responsibility of Congress to ensure that investors, entrepreneurs and business leaders do not perceive their best opportunities lie offshore. Any Congressperson who does not understand and accept these fundamental economic truths is not qualified to set economic policy for a country founded on free-market principles.

We conclude by asking the President and both houses of Congress to recognize the job killing nature of the U.S. Job Burden and to issue a “Sense of the Congress” declaration advising the world that the United States is committed to eliminating the U.S. job burden and is once again open for business. The force of this simple declaration would immediately ease the economic uncertainty holding back our business expansion and job creation. That economic expansion and job creation would continue provided Congress actually implements on a timely basis the policies that eliminate the U.S. Job Burden.

Please review our plan to eliminate the Job Burden and the rest of our economic roadmap at http://americansunitedparty.blogspot.com/2011/07/executive-summary.html Thank you for taking the time to read our thoughts and we wish you good luck and great success on your journey to restore our economy.