By Chic Hollis – Philosophical Musings
Gamblers! Of course everyone knows that! In the gutted remnants of the capitalistic system we have in America today, few egotistical risk takers or entrepreneurs dream about making a lot of money from launching new and better products or offering new and more consumer friendly services or opening a convenient location to shop. They are afraid to use their savings or borrow money to start a business doubting that the market will be responsive to any audacious initiative.
In any recession employed citizens worry about losing their jobs and wonder when jobs will become available for the unemployed. That will happen only when businessmen and women begin again to gamble because they have become convinced that there will be a clamor from consumers for what they produce and put on the market.
The government can create jobs also, but those jobs must be funded differently. Taxes or fees eventually must be increased to pay the wages of new hires in the numerous agencies of the expanding bureaucracy. Taxpayers are not fond of tax increases because most taxpayers are not directly purchasing or actually receiving the services that a government is providing favored citizens. Frugal people will spend money to buy something for themselves, their family, or their close friends. Most folks are not very eager to be donors, unless they are rich. Those who are broke or unemployed don’t have any loose change to give to governments, charities, and beggars.
Gamblers come in all sizes, shapes, and colors. They can be sincere, amiable, and industrious or they can be overly ambitious, greedy, and self-serving. The main interest of those gamblers who open a business is to find a way to employ others and make a profit from whatever they sell that will pay themselves a good return on their investments plus a substantial bonus for being daring entrepreneurs! All these eager-beaver dreamers expect to “make it big” one day.
Risk-adverse savers and conservative investors are leery of the pitfalls of starting your own business. Business failures are common, and “mom and pop” enterprises are the most susceptible to failure for a variety of reasons. So, who are the gamblers today ready to open a new location, add a new product to their lines, borrow or invest the capital necessary to expand their operations, and hire additional employees? Only those few who view the future with rose-tinted glasses.
The globalization of trade has resulted in the transfer of manufacturing jobs to countries where labor costs are a fraction of the costs of wages and fringes in the U.S. Those manufacturing jobs won’t be repatriated soon, if ever. Thanks to the rapid advances in communications technology, customer service jobs have been set-up in countries where educated people speak English as a second language.
What new industries will be launched in the U.S. to employ the thousands of workers laid-off or permanently terminated? Gamblers like the federal government and the California state government that lack capital and credit cannot consider plans for expansion. The banks burned by their recent exuberance in dispensing credit are reluctant to finance unproven enterprises. The creation of jobs is doubtful in locations where rents are high because owners are unhappy with lack of space utilization. Owners, always hoping that a vigorous economic recovery will begin soon, aren’t eager to sign leases with tenants if low introductory rents aren’t negotiable.
With unemployment conservatively estimated at more than 12% in California, this state needs jobs. What the federal government did to reduce unemployment on Indian Reservations when they authorized Indian tribes to create a new industry of casinos to attract “big gamblers” to “reservations” is the type of innovation necessary to create new jobs and generate a reversal of the stagnation in employment existent today. Casinos also created a revenue source for states to tax.
The increase in the employment of women over the past 70 years has resulted in a greater demand for jobs that only men filled originally. Thanks to the added competition, wage increases for certain occupations had been modest. Many nuclear families cannot enjoy a modern standard of living without both parents contributing something to the checking account each month to cover the expenses of raising a family.
The scarcity of minimum wage jobs in the U.S. today is due to the influx of illegal immigrants ready to work for whatever wage. The lax enforcement of federal immigration law to discourage employers from hiring illegal aliens has ignored the practice of hiring falsely documented immigrants.
Although a controversial policy that began in 1942 of issuing work permits to “contract workers” called the Bracero Program ended in 1964, the availability of minimum wage jobs in agriculture, retail, and fast food has brought a continual flood of Latinos into the U.S. looking for work and money to send home to support their families. Part time work formerly given to high school age youths or poor and unskilled laborers is now mostly done by immigrant labor.
So, where will the new, globally competitive, labor intensive jobs come from when cautious gamblers have seen banks refuse credit for expansion schemes that seem to be too optimistic? There are many empty office spaces, retail store fronts in malls and shopping centers, and houses being repossessed. Wage earners are paying down credit card debt. Savings have been increasing since the beginning of the Great Recession despite record low interest rates. Spending is marginally up in certain product lines, but the recovery of the economy is insufficient to attract many gamblers to place new bets.
The turnaround of the Great Depression in the U.S. resulted from the federal government spending to help our allies fight WWII until Pearl Harbor was attacked by the Japanese. Then the government launched a second-to-none local military/industrial complex that put everyone to work or sent them overseas to fight. The pent-up consumer demand due to rationing during the war kept up the spending momentum after the war and initiated the prosperity of the second half of the 20th century.
Today, citizens are tired of unproductive wars and leery of political promises of “better times.” The gamblers are ready when the economic picture improves because interest rates will never be lower! In the meantime, if you are unemployed, try to be prepared for one of the jobs that will be needed “when things begin to pick up” and the gamblers are active again.