Recently an article in the new york times had pointed out a problem in the manufacturing sector, namely a mismatch of the skills that requires of the current manufacturing workplace, and the skills of the workers that were laid off:
http://www.nytimes.com/2010/07/02/business/economy/02manufacturing.html?_r=1&scp=1&sq=manufacture%20hiring%20workers&st=cse
Manufacturing is vital to the nation’s growth, as the wealth of the nation is not measured by how much money you make day trading, how much pay raise that the average workers get, but in how much good the economy produces – that is, by GDP, gross domestic production, or total amount of good/services produced by all in the economy.
I believe that given the situation described the article, it would be good policy for the government to introduce a training tax credit for manufacturing employers to train potential employees for the jobs that they do. This would give employers incentive to hire, even if the trained workers leave after they are trained and work for awhile, at least they are getting the help to produce their goods and a tax credit in the meantime.
The government’s investment in the form of training tax credit would be compensated by taxes collected from the workers that would then be employed, and their other future jobs, and by reduced payroll in unemployment benefits currently paying. At the same time, workers would feel better about themselves, being employed.
From the workers’ perspective, it avoids making them going back to school, garnering debts from a classroom that may teach skills in general subjects but not certain highly specialized skills in manufacturing. Everyone wins.
Currently, there are many jobs skills that have become obsolete and many of them will never come back. By simply doling out unemployment benefits to these people for an infinite amount of time is unsustainable for the government, unfair for the taxpayers, and would never give enough for the unemployment recipients to allow them to improve their situations. Simply asking employers to hire where the workers obviously do not have the skills put much of their businesses at risk of human errors therefore is not feasible either.
I believe that a policy such as a training credit for employers is the best option for the government currently as it will get employers to hire, unemployed to work, unemployment obligations to shrink, and payroll tax receipt to increase. It is the financially feasible and responsible thing to do for the government, and there are no losers.
Of course not all sectors are affected by unemployment the same way, and the training credit need not be applied across the board. But I do see that this would certainly be beneficial in manufacturing, as such skills tend to be specialized.
There are solutions to current unemployment situation, I believe we simply have to act on them. And given the mass suffering that it brings, we certainly have to act on them more swiftly than not.
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{ 5 comments… read them below or add one }
Thanks for the comments. To subsize the unemployed or not has been a deeply divided issue, and an issue that will be increasing divided as the length time for persistent high unemployment increases. However, the training credit for manufacturing would not be divided as both the employed and unemployed, as well as the government benefit from it in the long time. It’s a win-win for all.
Go Sarah Baby
Sarah Palin thinks otherwise. Read the exclusive interview
I support any idea to help manufacturing.
CW,
Sounds interesting! Let’s hope someone in Washington is giving it some thought.