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Productivity Gains and Job Growth 2/12/2004 9:34:14 AM
Productivity gains will probably be found as the major culprit for the Job loss since before the last Recession. The Job losses will not likely return, and CEA predictions of massive Job recovery in 2004 are already proving false. A general overview is necessary.
George W. Bush must attempt reelection with an Economic record which is deplorable. There has been loss of Millions of Jobs, Household Income is up though not up as much as Household Expenses, and he has created a vastly expanded National Debt by poorly-conceived Tax Cuts. He is unlikely to be reelected, unless he can solidly account at least one million new Jobs before November; this demands an actual increase over the 130 million Jobs of 2003. He will fail to accomplish this, and here is why?
Bush pushed for Tax Cuts since the start of his initial Campaign to get elected. Business prepared itself for a Government-friendly environment from this Period, and fully expected a massively-reduced Tax load. They quickly investigated areas of added investment. The Tax Cuts, as promised by Bush, finally arrived with Business immediately introducing the new Investment schedules. This brings Bush's eventual downfall.
Business adopted a basic Investment schedule devoted to Technology capitalization for the specific purpose of maximizing Productivity gains (i.e., raising the Productivity per Labor hour). A more relevant concept of Productivity may be a statement: Increasing the Productivity Dollars of Product sale per Labor Dollar of expenditure. Business used the Tax remissions to fund Outsourcing for cheaper Labor, shrinking the Labor Dollar expenditure per Productivity Dollars gained. Business invested Tax remissions in Software programs which substituted basic programing for human intervention, and Job eliminations began to mount; the perfect manner to shrink the total largesse of those pesky Labor Dollars.
Bush now faces big trouble. Business continues to cut Jobs and Outsource Production, with Wage Income draining from American Households. Maintenance of the Tax Cuts ensures the current trends will continue, and Business Profits will not even fund Government expenses. Reality stands that Bush is trying to entice the American Voter with the slogan: Elect Me, and I will make you destitute! lgl
