John Florez: Job growth, economy link broken

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  • donahoe NSL, UT
    Jan. 21, 2014 9:18 a.m.

    Your premise is that there is real "productivity" growth. That metric deserves review and discussion. Wealth is not the same as productivity, because one might make great income on financial speculation alone without producing any future value. To provide an example, let's say I get a GI loan for a $10,000 house in 1960. I sell it for $900,000 in 2010. Is that real productivity or just government sponsored windfall? The value was only in the transaction, no physical improvements or social benefits arose. What if the value of that home drops to $500,000 the following year? This example hints at what is happening under our ongoing "financialization" economic trend. Technology plays only a minor element, only reducing transaction costs. O there is more afoot than "technology". John, I'd like to read more discussion in your future articles.

  • mark Salt Lake City, UT
    Jan. 20, 2014 11:13 a.m.

    "American capital has joined with Communist China to crush American labor."

    Marxist, I'm usually not a fan of things that smell of conspiracy theories. Care to expound?

  • marxist Salt Lake City, UT
    Jan. 19, 2014 3:34 p.m.

    There are a lot of things we could say about the troubled state of American labor. Florez has offered a somewhat academic account of what is happening, but it misses the backdrop which is this: American capital has joined with Communist China to crush American labor. That in a nutshell is what's happening.

  • bandersen Saint George, UT
    Jan. 19, 2014 12:14 p.m.

    Mark and Fred: Both of you focus only on the present instead of how we got into the present. If you want things to change, you can't quibble about things around the edges! both of you imply a desire to kill the goose that laid the golden egg, capitalism. You can't, however, have it both ways, which is exactly what both the Democratic and Republican parties want! Both parties will throw a red herring in front of a naive and uneducated mass to placate them! Issues like raising the minimum wage, or universal healthcare, are two of the latest attempts to marginalize and placate the hopes and dreams of anyone that wants to achieve? whether it is the war complex, crony capitalism, government dependency programs; each are only a ruse to enslave the deluded masses! So, if you want liberty, justice, freedom, and opportunity, you can't pick your own little issue, while ignoring everything else. Principles help all nations rise. It is not complicated! The opportunity is there to unleash the mechanism that made us the richest nation on earth that the world has ever known! Forget about the "buts" and let it it loose!

  • Fred44 Salt Lake City, Utah
    Jan. 19, 2014 8:31 a.m.

    Mike Richards,

    Help me understand how the government is killing the business? We have record corporate profits and the lowest tax rates on business in 60 years. Seems to me like corporations are doing really well. In terms of outsourcing, lets be honest about what that outsourcing really is and then ask ourselves if we want to compete with the countries where businesses are going to. Do we want to return to the days of child labor? Do we want to return to the days of sweatshops with 60-80 hour work weeks with non concern for worker safety. You are right that we are now in a global economy and to maximize profit and compete with third world countries for manufacturing jobs that is what we will have to do.

    Is it to much to ask owners of major corporations to have values and principals, to pay a living wage, to not hire children to be slave labors to produce your goods, and yes to make just a little less profit for the good of society? Hey and maybe put the salvation of America somewhere near corporate profits in importance?

  • mark Salt Lake City, UT
    Jan. 19, 2014 3:42 a.m.

    wrz, so what you are saying is you think we should be making like 25 cents an hour, or whatever they pay in some foreign countries.

    "If we are to compete with foreigners for jobs, we must also compete with their labor and benefits rates."

    Compete with China on their wages. Yeah that makes sense. Pay people a couple of bucks a day. Yeah that's what we need.

    "US corporate taxes are the highest in the world. "

    First of all, no they aren't. Second of all, let's see where we are: cut taxes for huge corporations with massive profits, and pay the employees two dollars a day. Yeah, great sytem you got going so far.

    - a rising tide lifts all boats. Of course it's wrong, it was wrong when Reagan was pushing this idea.

    The best thing that could happen for our economy is for people to at last come to the realization that Ronald Reagan and his ideas were some of the worst things that have ever happened to this country.

  • Capsaicin Salt Lake City, UT
    Jan. 19, 2014 12:45 a.m.

    Greedy capitalism doesnt work. Generous capitalism does. Just like he says. "THE NEW ECONOMY" is selfish hoarding of wealth by the top 10%. They don't raise wages. They don't raise salaries. Raising wages and salaries, not hoarding profit, and charging a decent amount for goods and services is GENEROUS capitalism. Something thats in sharp decline. All the while we have a government devaluing our money. They continue to hide the REAL unemployment data which we all know is much higher than 8%. We have a plethor of un-needed jobs that debt (stimulus) is funding. All the jobs that non-stimulus debt is funding. And the general in-efficiency that is government. Having all these frivolous government jobs that are funded solely on tax revenue pads the unemployment numbers too. If you look at the numbers, there are approx 10-20% of the population that requires some kind of assistance to get by. Is this due to lack of education? Lack of respect for fellow man (cheating the system)? Lack of livable wages? Yes, it is. But it's also due to burdensome debt, where our economy is jeopardized by a large percentage of tax revenue being spent on bonding (debt) interest.

  • bandersen Saint George, UT
    Jan. 18, 2014 10:33 p.m.

    The answers are simple, but both the Democratic Party, of which John is a part, and the Republican Party, of which I am not a part, both run as far away from the answers as possible. This problem requires leadership, something missing in Washington for almost a century! if you want specifics, don't look anywhere in parties! The answers are there! When someone comes forward with them, I don't care where or who, I will follow! Until then, education is the answer, none of which was found here! Anyone can say there is a problem! I want to hear answers, some of which were expressed by those commenting?

  • Badgerbadger Murray, UT
    Jan. 18, 2014 10:32 p.m.

    More money spent on unemployment will not fix this problem.

    The economy is not doing well. IF the Obama administration would be honest about the lack of recovery, then the real problem could be addressed. Denial and lies to cover for that denial are causing the horrible jobs situation.

    'Printing' money to give to the unemployed only makes matters worse. If the government can trim other budgets to pay for it, that would be a step in the right direction, but only when couple with some pro-private sector job policies. I am not talking subsidies. I am talking fewer hoops for businesses to jump through and lower taxes so they can actually afford to expand their workforce.

    I fear that any growth in the US economy lately comes from the growth in things like pay-day loans.

  • UtahBlueDevil Durham, NC
    Jan. 18, 2014 10:31 p.m.

    I find some of these comments most humorous. The constant cry that a) taxes are the problem or b) socialism is the problem. Here is the problem with those claims.

    1) the minimum tax rate in the US for corporations is 0%. The is right - Zero. With good tax planning, many US corporations pay no federal income tax. China which has an economic growth rate(7.7%) three times our own (2.8%), has a minimum tax rate for corporations of 25%. 69% of all US corporations pay no federal income tax. 300 of the top 500 US corporations pay less than 18% federal income tax.

    2) Russia, China, Cuba, Vietnam, and even Venezuela (at 5.6% growth rate) all have greater growth rates than so called non-socialist countries.

    Not defending or even recommending taking any of these countries paths... but by the numbers the corollaries to socialism or taxes doesn't match the claims about economic growth. It is just too easy to find data points that show otherwise.

    There are problems... but these are not them.

  • LovelyDeseret Gilbert, AZ
    Jan. 18, 2014 9:14 p.m.

    This is a worthless article. The writer of this article completely ignores inflation in his equation of the economy. Jobs aren't going to be produced when money loses its value. You can't create an economy with a printing press and then expect job producers to buy into it.

  • Kings Court Alpine, UT
    Jan. 18, 2014 8:34 p.m.

    I don't think it will be possible to train everyone to be successful in this "new" economy. We have a paradigm where one person can control hundreds of machines and now, even machines are running other machines. If we keep going down this path, there will be hardly any jobs for the rest of us. They will all be done by robots owned by large corporations and the rest of us will simply be in the way. That is our future.

  • Mr. Bean Phoenix, AZ
    Jan. 18, 2014 7:44 p.m.

    Good job, Florez. You hit most of the points.

  • wrz Phoenix, AZ
    Jan. 18, 2014 5:38 p.m.

    Good article... except Florez posed mostly questions, with no answers. So, here's some answers:

    Prevent our manufacturing jobs from going overseas and try to start moving them back home. How do you do that? The biggest cost of the manufacturing industry is labor... 80 to 90 percent. Unions have driven labor and attendant benefits out of sight. Cut labor and stop with the minimum wage laws. If we are to compete with foreigners for jobs, we must also compete with their labor and benefits rates. Will the US do this? Bot likely.

    US corporate taxes are the highest in the world. Corporations don't pay taxes. Only people pay taxes. Any 'tax' a corporation (or other business entity) pays is added to the cost of production and the consumer ends up paying it. So, let's cut corporate taxes.

    Too late, but stop showing foreigners how to do things. Japan/China people used to come here to tour of our manufacturing facilities. Then they'd go home and set up their own facilities to compete. Dumb idea for us to be so nice and divulge our secrets.

    Stop importing labor... illegal immigrants.

    And there' more but I ran outta space.

  • marxist Salt Lake City, UT
    Jan. 18, 2014 3:28 p.m.

    Yes, this is a good column as others have said, but it is too narrowly focused. Technology change is only part of the picture. The bigger picture is one of capital throwing domestic labor overboard in favor of much lower wage foreign labor, foreign environmental controls (or lack thereof), and foreign labor safety (or lack thereof). This latter John should appreciate due to his tenure on the Industrial Commission. If American labor were willing to accept a Chinese wage and Chinese working conditions we could have many of these jobs back. But THAT price is just too big. This calls for wholesale changes in our economic system - they will come if labor continues to be squeezed. Globally, for labor it is a race to the bottom. And for capital (corporations) it is a race to the top. Nature hates an imbalance like this.

  • Meckofahess Salt Lake City, UT
    Jan. 18, 2014 2:48 p.m.

    Mr. Florez,

    Thank you for writing such an insightful and profoundly true message in your column. We need to look out more for each other and not just look out for making profits. Not sure where this country is headed if we continue to allow the 1% to feast while turning our heads while many in the 99% suffer. Probably the biggest blot on the character of America is our over priced healthcare system. There is too much focus on making huge profits in healthcare for just a few people to enjoy. A family works a whole lifetime for a home and a little happiness only to see it all jeopardized if a family member becomes seriously ill and ends up in a hospital without insurance. The family can lose all their security while the doctors and hospital administrators count their revenues. If the healthcare providers can lower their costs, then presumably insurance premiums could go down too.

  • David Centerville, UT
    Jan. 18, 2014 1:45 p.m.


    It appears you are arguing for a trickle down corporate approach. If Walmart pays it's employees more then the company would realize greater sales & profitability.

    Are there any studies or evidence that this is true? If so, then "trickle down" is a viable political & corporate strategy?

  • Mike Richards South Jordan, Utah
    Jan. 18, 2014 1:35 p.m.

    Just what does Mr. Florez really propose? Does he want government to raise taxes to feed those out of work or does he want taxes lowered to keep jobs in America? Does he want government to create more government jobs, which will be paid for by taxing the private sector since government cannot pay out in wages what it has not collected in taxes? If the private sector has more of its money seized by the government, just how will that promote job creation in the private sector? Without job growth in the private sector, just who will pay the taxes that pays government to create all of those "public sector jobs"? Does he want more rules and regulations to price us out of the world market?

    The problem is government. It has almost killed business. We are part of a world economy. Other nations make it attractive to move production "off-shore", which will leave us with McDonald/Wal-Mart type jobs.

    FDR started the mess. LBJ continued it. Obama is nailing the coffin shut - with us trapped inside.

  • Brer Rabbit Spanish Fork, UT
    Jan. 18, 2014 11:53 a.m.

    Mr Florez is right the job market is changing. Productivity has greatly increased due to mechanization and automation eliminating tens of millions of jobs in the last three decades. Many American workers have improved their skills and taken advantage of these changing workforce needs. Millions of more jobs have been off-shored to cheap labor countries, which has caused wages in many job sectors to become stagnant or decline.

    Employers who are unable to completely mechanize, automate, or off-shore depend on a continuing flood of foreign, legal and illegal cheap labor to maintain suppressed wages. Occupations such as agriculture, hospitality(hotel maids,restaurants, etc), are unable to off-shore for cheap manual and menial labor. Labor just like all goods or services depends on supply and demand for setting prices (wages). Flooding any sector of the labor market with a surplus of labor will depress wages. The U.S. presently has a large labor surplus, high unemployment.

    Americans and employers are being conditioned to think that manual or menial labor jobs are fit for only immigrants. This has depressed wages for many hardworking Americans, especially Blacks and Hispanics, increasing welfare and other subsidies supported by the taxpayers.

  • 10CC Bountiful, UT
    Jan. 18, 2014 8:36 a.m.

    Great column by Florez, again.

    There is no economic law indicating that productivity must always result in greater wages, and this is part of the conundrum of this particular business cycle "recovery". In past business cycles - and past technological waves - employment and wages have always "caught up" with the seismic changes, but especially as the economy becomes globalized and capital can flow across borders with no resistance, all the historic economic assumptions are in question.

    As companies make more money - from increased productivity due to downsizing and implementing technology - they can easily re-invest those profits in foreign markets, and not keep the money in the US economy, where increased wages and employment would stimulate greater demand for their products.

    In a way, this is like a bubble, an irrational focus on chasing illusory additional profit, elsewhere... when the answer lies here, in America, but globalization has distorted that intr-nation feedback that would help companies re-invest in the US, and see our domestic market grow commensurately with productivity gains.

    Walmart's sales are flat, but if they paid their workers more, and other retailers followed, their sales would improve enough to cover the costs.

  • David Centerville, UT
    Jan. 18, 2014 7:05 a.m.

    This is a well written, good article. Thank you John Florez.

    I agree that schools must rewrite their curriculum so that students can compete in this digital, global economy.

    I agree that in many cases, those on employment insurance for long periods of time don't want to be there. They would much rather be working.

    Florez should have included a critique of this administration for not helping to create those jobs that are so desperately needed.

    Proposals could include reducing the barriers to energy development. Look what is happening in the Dakotas with their economy because of the energy industry. The Canadian oil line could help with jobs.

    Florez could have also included a critique on this administrations recommendation for increasing the minimum wage, which will further the move in business to machines doing what workers used to do.

    Florez could have criticized the administration for Obamacare, which has put the breaks on employment as business is hiring more part-time workers in order to avoid the healthcare tax for full-time employees.

    Good article, just missing some pieces to the employment picture.

  • UtahBlueDevil Durham, NC
    Jan. 18, 2014 6:10 a.m.

    One of the keys to continued employment is to either be able to do or know something that other do no.

    When the majority of the world used to live in 3rd world status, that was an easy task. But that skills gap is going away at an accelerating rate, and the competition for these jobs is growing exponentially. The good news for business is that this is also bringing increased demand for products and services. Asia and the middle east are now the hub of aviation sales. Boeing and Airbus are enjoying the fruits of this market explosion.

    But 30 years ago, most if not all the major components of a jet liner came from one or two countries. Today those jobs are spread over dozens. There is a new normal emerging, and the 55 year old described above is in a really tough place. The 55 year old needs to reinvent himself, and will need help doing so.