Januarys unemployment rate was 7.9 percent. Only 157,000 jobs were created. And GDP shrank in the fourth quarter of 2012.
Naturally, many are concerned about their jobs.
Is this the new normal? If so, its time for a few changes.
» Abolish employer taxes for Obamacare. The Patient Protection and Affordable Care Act is making hiring less desirable. Next year, employers with more than 49 workers who do not offer the right kind of health insurance will face annual taxes of $2,000 per full-time worker. A firm that expands from 49 to 50 workers could face an annual tax of $40,000 (the first 30 workers are exempt).
Because part-time workers are exempt from the tax, food chains such as Olive Garden and McDonalds are reportedly thinking of moving workers to part-time. Even professors are not immune: The Community College of Allegheny County is reducing hours of adjunct professors to avoid the tax.
Firms have an added incentive to become more automated, to use more machinery and employ fewer workers, even in industries where this might have been comparatively expensive until now.
A solution: Just stop requiring employers to offer health care. Food, clothing and housing are equally important, but government does not require employers to provide them. Replace the employer tax with another tax that does not penalize employment, such as an income tax or consumption tax. Taxes on employment inhibit job creation.
» Lower the minimum wage. Januarys teen unemployment rate was 23 percent. The increased minimum wage, which rose in three steps from $5.15 an hour in 2007 to $7.25 an hour in 2009, is pricing teens and low-skill workers out of the job market. Payments for Social Security, Medicare, unemployment insurance and workers compensation bring the hourly total closer to $8.
The practical effect of the law is that workers with skills worth less than $8 an hour cant find work. Thats one reason that teens and unskilled adults have high unemployment rates. Thanks to the higher wage, firms are investing in equipment such as self-scanning machines in supermarkets to substitute for employees.
Under federal law, employers are allowed to pay teens $4.25 an hour for 90 consecutive calendar days, or until their 20th birthday, at which point the wage has to revert to $7.25 an hour.
A solution: Expanding the federal minimum wage exemption, and extending it to low-skill workers, could reduce their unemployment rates.
» Stop the war on fossil fuels. Everyone knows where the jobs are -- North Dakota, with a 3.2 percent unemployment rate. And everyone knows why -- the New American Energy Revolution is bringing new oil and natural gas out of the ground through hydraulic fracturing. North America may become a natural gas exporter by 2020, according to the International Energy Agency, and a net energy exporter by 2035.
Everyone knows where the jobs arent -- alternative energy, even though solar and biofuels have received billions in government loans and grants. Some companies that have gone bankrupt after receiving government support are Solyndra ($528 million from Uncle Sam), Abound Solar ($400 million), Beacon Power ($43 million) and A123 ($249 million).
The Energy Department, the Interior Department, the Environmental Protection Agency, even the Securities and Exchange Commission -- all have regulations in the works for fracking that could stem the New American Energy Revolution.
A solution: Leave such regulation to individual states, as is the case at present.
With GDP in decline and unemployment in the headlines, its time to look at some low-cost solutions to spur economic growth. By redesigning the Obamacare employer tax, lowering the minimum wage for teens and unskilled workers, and keeping their hands off fossil fuels, Congress and President Obama could create more jobs without spending another dime.
Original Source: http://washingtonexaminer.com/diana-furchtgott-roth-cheap-fixes-for-the-jobs-bust/article/2520633