Trump’s plan for more and bet­ter jobs

More school choice, less fed­eral reg­u­la­tion and com­pet­i­tive busi­ness taxes of­fer a brighter fu­ture

The Washington Times Daily - - COMMENTARY - By Peter Morici Peter Morici is an econ­o­mist and busi­ness pro­fes­sor at the Univer­sity of Mary­land, and a na­tional colum­nist.

Good jobs are still too scarce, and the coun­try needs Pres­i­dent Trump’s trade, bud­get and tax re­forms to re­store op­por­tu­nity, ac­count­abil­ity and the Amer­i­can dream. The re­cent eco­nomic re­cov­ery has pro­duced about 185,000 jobs a month. That’s sub­stan­tially less than dur­ing the Rea­gan and Clin­ton ex­pan­sions, and not enough to put most Amer­i­cans into good pay­ing po­si­tions. Head­line unem­ploy­ment may be 4.4 per­cent, but mil­lions are stand­ing on the side­lines. Pres­i­dent Obama broad­ened ac­cess to Med­i­caid and food stamps to in­clude child­less adults who are nei­ther in school nor seek­ing em­ploy­ment. Among work­ing age adults, abuses ap­pear wide­spread in the So­cial Se­cu­rity dis­abil­ity sys­tem.

Over­all, we have gone from as­sist­ing the job­less to pay­ing for unem­ploy­ment.

Two per­cent growth is not enough to turn things around, but the rev­o­lu­tion in ro­bot­ics and ar­ti­fi­cial in­tel­li­gence of­fers op­por­tu­ni­ties to pro­pel pro­duc­tiv­ity and liv­ing stan­dards.

The next gen­er­a­tion of Boe­ing jet­lin­ers will be as­sem­bled with more ro­bots — mov­ing and fix­ing com­po­nents into place. What peo­ple are left will be greatly as­sisted, for ex­am­ple, by Google Glass and soft­ware that aid in as­sem­bling the com­plex wiring and pro­gram­ming of cock­pits.

Lyft and Uber bring cars to pa­trons but elim­i­nate the dis­patch­ers. They han­dle mil­lions of pas­sen­ger re­quests with com­put­ers and so­phis­ti­cated soft­ware, and can pay driv­ers a sig­nif­i­cantly larger share of pas­sen­ger fares than do tra­di­tional limou­sine ser­vices.

These raise fears of job losses, but la­bor sav­ing in­no­va­tions are as old as the cross­bow and the wheel. His­tor­i­cally, economies re­sponded by mov­ing work­ers into new jobs and emerg­ing in­dus­tries — as agri­cul­ture mech­a­nized, work­ers moved to man­u­fac­tur­ing and then to ser­vices. As break­throughs in pro­duc­tiv­ity trans­lated into higher in­comes, those boosted de­mand for the prod­ucts of farms, fac­to­ries and ser­vice providers mak­ing these tran­si­tions more man­age­able.

New tech­nolo­gies are cre­at­ing large new em­ploy­ers — for ex­am­ple, Al­pha­bet, Face­book and Tesla. How­ever, the econ­omy is not cre­at­ing enough new jobs, not be­cause we are in­vest­ing too much in ro­bots and ar­ti­fi­cial in­tel­li­gence, but be­cause Amer­ica is not in­vest­ing enough in them.

We are los­ing out to com­peti­tors like Ger­many and China, which fea­ture more busi­ness friendly reg­u­la­tory and tax regimes, and are putting up new fa­cil­i­ties and mod­ern­iz­ing more quickly. Too of­ten, Amer­i­can com­pa­nies that come up with great prod­ucts do a lot of pro­duc­tion and de­sign work off­shore. For­eign gov­ern­ment poli­cies com­pel busi­nesses to lo­cate assem­bly, source com­po­nents or es­tab­lish R&D in their mar­kets to gain ac­cess for their prod­ucts. The chal­lenges Gen­eral Mo­tors and Ap­ple face in China are no­table ex­am­ples.

Still, many of our prob­lems are home grown.

Too many Amer­i­cans sim­ply don’t qual­ify for the skilled po­si­tions that pay high wages in a glob­al­ized, tech­no­log­i­cally-ad­vanced econ­omy. U.S. man­u­fac­tur­ers can’t find enough skilled work­ers to meet de­mand, and high schools are not ad­e­quately pre­par­ing stu­dents for post-sec­ondary tech­ni­cal pro­grams or col­lege work. En­ter the Trump eco­nomic pro­gram.

Ex­pe­ri­ence with work re­quire­ments for wel­fare and other so­cial as­sis­tance pro­grams in­di­cates that cut­ting fed­eral spend­ing by im­pos­ing sim­i­lar re­quire­ments for food stamps, Med­i­caid and other pro­grams would en­cour­age more folks to seek train­ing and em­ploy­ment and re­duce poverty.

The pres­i­dent’s bud­get seeks to give par­ents more op­por­tu­ni­ties to move chil­dren from fail­ing to more suc­cess­ful public schools and greater ac­cess to vouch­ers for char­ters schools. Cut­ting fund­ing for the po­lit­i­cally cor­rect bu­reau­crats at the Depart­ment of Ed­u­ca­tion who med­dle in lo­cal school and col­lege af­fairs is a clas­sic ex­am­ple of less equals more. Rene­go­ti­at­ing in­ter­na­tional trade agree­ments — as Com­merce Sec­re­tary Ross and Spe­cial Trade Rep­re­sen­ta­tive Lighthizer have been tasked to do — are crit­i­cal steps for open­ing for­eign mar­kets to Amer­i­can com­pa­nies that have been forced to trans­fer jobs and tech­nol­ogy in­stead of ex­port­ing. Rolling back un­nec­es­sary reg­u­la­tions and cor­po­rate tax re­form to lower rates to lev­els com­pet­i­tive with other in­dus­tri­al­ized coun­tries—and ap­ply­ing those rates to the ma­jor­ity of Amer­i­can busi­nesses that are or­ga­nized as lim­ited li­a­bil­ity cor­po­ra­tions but pay tax through the per­sonal in­come tax sys­tem—would fa­vor­ably al­ter the fi­nan­cial cal­cu­la­tions about whether to em­ploy more work­ers in the United States or move ac­tiv­i­ties off­shore. We should be clear there is no sil­ver bul­let. Re­form­ing en­ti­tle­ments, more school choice, less fed­eral reg­u­la­tion and more com­pet­i­tive busi­ness taxes would work to­gether to bet­ter en­sure all Amer­i­cans a brighter fu­ture.


Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.