The American Jobs Act provides yet another example of President Obama potentially snatching defeat from the jaws of victory. It proposes a punitive response to a problem that now plagues the country -- employers are hesitant to hire the long-term unemployed. The missed opportunity is still there to be had: How about providing incentives?
At issue is the Job Act's proposal to make it "an unlawful employment practice" to refuse employment "because of the individual's status as unemployed," so long as the potential employer is a business with at least 15 employees. Obama is trying to attack a real problem -- about 6 million Americans are "long-term unemployed," with nearly three-quarters of them being unemployed for more than a year. Outrageously, companies are actually stating in job listings that they will not accept applicants who are not currently employed. But does it really make sense to elevate unemployment to a protected status with race, creed, national origin or anything else protected by the Constitution?
This proposal would be a double whammy for many job seekers, because employers are also increasingly checking the credit reports of potential hires. A 2010 survey by the Society for Human Resources Management reported that 60% of employers run credit checks on at least some job applicants (though most are performed for finance-related positions), up from 42% reported in a roughly comparable survey in 2006. Job loss and challenged credit tend to go hand-in-glove, irrespective of the moral integrity or financial management skills of the individual. One significant and unexpected medical bill can mean bad credit if your income consists of an unemployment insurance check every two weeks. In response to this trend, a significant number of the nation's state legislatures have introduced or passed laws that restrict the ability of employers to check the credit of the prospective employee. There is at least one piece of proposed federal legislation to a similar effect that has been locked in committee for the last two years.
To be honest, I'm a bit conflicted about this. On the one hand, I believe it is generally unfair to deny employment to an otherwise acceptable applicant solely because they have bad credit due to unemployment, or because they have been unable to secure a job in a very tough economy (or both).
On the other hand, maybe there are some circumstances where an employer's need to know genuinely outweighs any legitimate interest of a prospective employee, or society as a whole. Discrimination on the basis of race or creed or gender was outlawed for obvious reasons, but is it unfair to suggest that I'm not comfortable hiring someone to manage my finances when they can't manage their own finances? And what about the disgruntled, unqualified job applicant with the unfettered ability to sue a prospective employer on the basis of discrimination based on credit checking or job status? It would mean full employment for lawyers, but I do not believe that it will solve the unemployment problem that we face as a nation. If anything, it may well raise yet another barrier to those who are pounding the pavement at a time when we should be encouraging employers to stop outsourcing or using overtime and part-time staff instead of actually hiring the right person for the job. Honestly, I'm a bit concerned that the proposed rule may eventually amount to a federally protected right to employment.
Japan has and has had for many years a thinly disguised policy of "guaranteed employment," fostered by significant government subsidies to companies to make sure that they do anything but fire people when times are bad. Japan's economy has faltered for more than two decades, which in the opinion of many observers is, in part, a result of that policy.
While we applaud the intent of any measure intended to help the unemployed, the proposed legislation may be a non-starter. One of the few abiding principles of American law that really works is the legislative notion that requires disclosure of material facts, rather than prescribing or proscribing any action which might be reasonably taken by a business or individual. Instead of monitoring and attempting to control the criteria by which employers make judgments about applicants, let's write a piece of legislation that requires an employer to give to any applicant a standard disclosure, explaining why a credit check is necessary in terms of the position applied for, explaining how the information so collected will be evaluated, and eventually requiring any rejection based upon that information to be fully explained.
Instead of trying to protect the unemployed job seeker from discrimination on the basis of their unemployment, create an incentive for hiring as well as honing the skills (or even the retraining) of long-term unemployed workers. This could be accomplished by lowering employer withholding contributions for a period of time following such a hire. The cost of this policy would be outweighed by the decline of unemployment insurance payments and other program expenses at the state and federal level, not to mention the indirect benefits to the economy. The current jobs bill proposes an easing of withholding requirements for government contracting jobs, but it could go much further.
We are a country of people who get things done, where there should be rights for both employers and employees -- and laws, too. The United States is a meritocracy where performance and results are rewarded. This is not a Constitutional matter. It's economic, and it will be solved with good sound proposals that reflect the reality of the economic climate and the needs of both the employer and the employee.
This story originally appeared on Credit.com.
Follow Adam Levin on Twitter: www.twitter.com/@Adam_K_Levin
Eric Tipler: Beyond the Creative Class
We have trusted the wrong people too long... Those we put in charge to look out for our best interests have failed. Not only have they failed us, but they have abused the powers we bestowed to them because they have been looking out for "Numero Uno"!
You might as well get use to our new way of life people this is what we got left to look forward too for all our hard work. This is what happens when you don't watch your own back and you trust the Government to look after your well being and you do not watch them!
You better start packing your backpacks, start walking the streets and get use to it cause it will soon be the only thing left that you can call your own. This is the new America... our new found freedom... One question for you all... Do you like it? Are you enjoying what you got????? Cause it appears this is all any of us have left to look forward too as long as our government continues to look out for their own interests and not ours! Does that star spangled banner still wave or did we just trade it in for our graves?
Manufacturing of other products such as pipe, wire, cement, reinforcing bars, plate steel, appliances, automobiles, transformers and many other items have been also relocated overseas to escape EPA regulations.
Even if we could repeal the EPA and fire all or their bureaucrats today, it would take many years or decades to re-create those industries and jobs into the USA.
Herman Cain wants to disband and/or reduce the scope of the EPA.
If the US government goes bankrupt (like Greece), the USA will be in chaos, the US citizens will not have any EPA, and then the USA might have to re-industrialize and start making the things that US citizens consume.
US manufacturing companies will never even consider creating any jobs in the USA as long as they are hamstrung with more expensive labor costs, ten times as expensive electrical energy (that is required to be generated in compliance with the EPA), high health care payroll tax costs, high unemployment payroll tax costs, social security payroll tax costs, environmental manufacturing costs, fringe (holiday and vacation) benefit payroll costs, OSHA compliance payroll costs, union labor work rules, and anti-business public attitudes that make manufacturing products in the USA many many times more costly than manufacturing the same product in almost any other foreign country?
I do not have confidence that the USA citizens still have the scientific knowledge and technical capability to re-create our factories for manufacturing, innovating and designing any new products for export as required to reverse our trade balance and restore the value of the dollar, as the USA did to create the US industrial machine that won WWII and created a the excellent lifestyle that US citizens enjoyed for a few decades after WWII.
And while we have the most complex rules and regulations in the world, we are not by far the cleanest country in the world.
American business is trying to hold the working class in America hostage to gather some truly minor economic benefits. When the tax rates were at the levels that they were under Clinton, the rich in this country did extremely well and the middle class did as well. They want to insure that the middle class doesn't ride that train anymore. As a side benefit, under Clinton's tax rates, the government ran a surplus that would have paid the DEBT off by the year 2009.
I do believe that it would be nearly impossible to prove that a person was not hired because he/she was unemployed long-term. This is a tempest in a TEA pot.
Can we all work for the government?
"FREE TRADE" treaties created by the US government ALLOW, CAUSE, and ECONOMICALLY REQUIRE that our businesses to take advantage of the lower labor costs, lower payroll tax costs, lower business taxes, and lower environmental costs available in various foreign countries?
This "Free Trade Legislation" was not in the interest of most of the citizens of the USA, so why did our elected congressmen create this "Free Trade Legislation"? Were they ignorant, stupid, dishonest, or some combination.
I believe that most of the foreign manufacturers paid US professional lobbyists to spend hundreds of thousands of dollars on wine, food, women, song, vacations, cash, sexual services, corporate jobs for the (unemployable) children/wives/girlfriends of the congressmen and their congressional aids who actually control the members of congress, and campaign contributions to entice (bribe) each of our US congressmen for the past 20 years to create all of these various "FREE TRADE LEGISLATION" and treaties that ALLOWED, CAUSED, and ECONOMICALLY REQUIRED our businesses to take advantage of the lower labor costs, lower payroll tax costs, lower business taxes, and lower environmental costs available in various foreign countries?
This "FREE TRADE" creates a steady stream of US dollars (NATIONAL WEALTH) flowing from US consumers to foreign manufacturers in the industrialized foreign nations!
Perhaps something that conservative white males always trumpet - PATRIOTISM. If you want to see American wages compete with the Philippines or Viet-Nam or Cambodia etc. please lean back and imagine the US after the wages have dropped to their levels. Will you still be shouting about American Exceptionalism when Hoovervilles are everywhere? Will you still swell with pride that America is the greatest country on Earth while you walk by the sweatshops that pay their workers seven dollars a day with no healthcare?
Or will you begin to promote single-payer health care for America? Perhaps you might embrace "protectionism" and push for the end of NAFTA, GATT and other trade agreements. Maybe you might focus on bringing manufacturing back to the US and put us back on the road to greatness. Maybe the push to buy US products that the Republicans now hate could mean something to you. Nah.... forget it. The bottom line trumps all.
President Clinton also destroyed the US domestic industrial protection policies with NAFTA, GATT, WTO, Most Favored Nation (MFN) status for China, Financial Services Modernization Act of 1999, H-1b visas, etc.
To be fair, George Bush and most all of the elected Republican and Democratic US Congressmen and Senators were also in favor of NAFTA, so I guess the US workers were just sold out for lower cost consumer products.
The Democrats and Republicans want to continue NAFTA, WTO involvement, and (MFN) Most Favored Nation status for China.
President Obama's proposed new South Korea Free Trade Agreement (KORUS FTA) treaty will cause further relocation of more existing US jobs to South Korea?
President Obama is now proposing more Free Trade Agreements with Brazil, Columbia, and other recently industrialized that will export more manufacturing jobs from the USA to foreign countries.
I guess another few more million unemployed US citizens will not matter to President Obama!
Mostly the candidates are already within the associations - statisticians, actuaries are Math Majors - members of the American Statistician Assoc; or Association of Actuaries - international and National Members. Competed 8 exams and at least 5 years experience.
These applicants are seasoned and snatched away from another company. Some are trainees or a recent graduate with an outstanding paper or a GPA not less than 3.5.
It's a competitive field and an all around leverage. For employers - the best candidate for the job; and for the employee: best wage parity and perks. I interned as Jr. Statisticians - most Math graduates have "internship papers" - mine was China: World Power 2016. I wrote my paper at 20. I was hired after that. My professors recommended me. Many of my colleagues were classmates, or from the same school.
We get calls all the time from VP's and depending on length of employment, you can negotiate your salary. I stayed with the same employer for almost 10 years, and presently the Dept Head - Statistical and Actuarial Div. I do not know anyone who are unemployed statisticians or unemployed actuaries.
I would not hire one who is not currently working in the same field. Not a good sign. A battery of investigatve background - scholastic records, professors recommendation, credit rating, criminal background, drug test - even interview with neighbors - exhaustive vetting. I have some input - but not the final approval.
Companies lay off the least productive people first. Teachers get laid off based on seniority, corporations let the least useful go first. So if someone's resume says "unemployed", what should you assume? Particularly when you know that others are still working at that same company? It may not be fair, but as a hiring manager you are supposed to hire the best people, not "give people a chance". This law is absurd and unenforceable.
I've seen great managers laid off (instead of lesser managers), not because they were less productive but didn't fit into a dysfunctional culture. I've seen people laid off because it would save two other positions. I've seen people laid off because they could compromise certain parts of their business more than others.
There are many ways that lay offs are decided.
I worked in high-tech and discarded all resumes from anyone who worked in defense for more than a year. They do "time and materials", people are paid to do nothing so government can be charged more. If you can stand that for any length of time, I don't want to work with you, I'll just be picking up the slack. There are lots of arbitrary reasons people hire or don't.
But you are correct - there is rampant discrimination based on height, tall people of either gender are paid and promoted more. Short people are discriminated against. That's not fair, but what do you propose to do about it? other than wear lifts :-) You can't necessarily recognize discrimination, never mind fix it.
http://www.slate.com/articles/arts/everyday_economics/2002/03/short_changed.html
Economists have known for a long time that it pays to be tall. Multiple studies have found that an extra inch of height can be worth an extra $1,000 a year or so in wages, after controlling for education and experience. If you're 6 feet tall, you probably earn about $6,000 more than the equally qualified 5-foot-6-inch shrimp down the hall.
Author is correct, it's a really, really dumb bill - and completely unenforceable.
True story: my ex quit working as tech writer to raise kids, then had trouble getting job when she returned. I made a deal with my little company, had her come work for a month for free, in exchange for putting it on her resume as a current contracting job. She got a job before the month was out. I'm not saying that was right, or it should be necessary. I'm saying that was in the '90s, in good times, but it was true even then.