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Just-in time hiring can help close the gap between job creation and hires during Great Recession in Minnesota
Former President Bill Clinton agrees that their is a "stunning" gap between jobs posted and jobs filled over the last 20 months. He says if these posted jobs had been filled at the same rate as all the previous recessions since WWII, national unemployment would be under 7% right now!
This is a response to a letter posted in the Shoreview Post (http://shoreviewpost.com/2010/09/read-further-on-mr-carlson-letter-to-th...) regarding my proposals of ways to drive private sector job creation in Minnesota to lead us out of the long-term unemployment the state faces. The exchange grows out of the only debate between myself, incumbent Rep. Betty McCollum and challenger Republican attorney Teresa Collett:
"April, you wrote, 'there can be no 'labor shortage' in MN when there is 7% (at best) unemployment here.' So you conclude that since I do not share your reasoning, I must be 'an economic fruitcake.' I think this is facile, and I think it does not help at all in the 2010 mid-term elections in Minnesota to divide the political world into just liberals, conservatives and 'fruitcakes.'
"Do you have a background in economics? There are numerous examples of this seeming paradox of positions going unfilled, but it is undeniably a fact of life. And I did a little more digging at the federal reserve site http://www.minneapolisfed.org/publications_papers/ to further clarify for you this issue of illegal affirmative action.
"Illegal affirmative action is rampant, where a firm, usually a large firm, decides that it will combat gender discrimination lawsuits by adopting requirements to favor women in hiring or other employment decisions in job categories where there has been no hiring discrimination historically. They then hire and retain large numbers of people who are not productive in any way but who help perpetuate this comparative worth bureaucracy and themselves (when you interview you have to know that employers have these kinds of people vetting the hiring decision behind the scenes, not judging your qualifications or likely performance if hired). But is it necessary and can we afford it during the great recession?
"I found an article that I think is on point called 'Down with the comparable worth bureaucracy' in the fedgazette Editorial at http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=3141
"I agree. Comparing our practices to Eastern Europe, a fed vice president warned that 'here in the United States, a major effort is under way to abandon the market in favor of bureaucratic decision-making' called comparable worth. 'Its proponents argue that it is needed to address inequities in pay between men and women. Proponents seem to be willing to give up advantages of a market-based pay system in order to get what they think is a fairer system.'
"The article explains that 'When basing pay on the market, the manager must answer a question. In setting pay for new hires, the question is: How much do I have to pay in order to attract a person with adequate skills to the open job?' He explains, the market determine wages the same way it determines the price for any good or service: by equating demand with supply. Demand for workers in a particular job is determined by how many workers all employers in a market want to employ at different wages, and that depends on the value these workers bring to the employers.
"But a comparable worth system will, in general, be different from market-based wages, because this type of system does not consider the demand for or the supply of workers for a particular job. Instead, it bases wages on the attributes of each job. Obviously, April, this means that comparable worth systems cause companies to ignore supply and demand of labor--in a recession--and instead focus on their little internal committees protecting the new status quo of illegal affirmative action. Courts are ignoring this at the country's peril.
"The fed explains that 'under a comparable worth system, a group or individual determines the relative value of different job types by awarding points to job attributes. Points—maybe from 1 to 10—are awarded for such things as education and training requirements, responsibilities over valuables, management and supervisory tasks, and long-term planning duties. The committee then adds up the points in some fashion for each job it evaluates and places jobs with similar point totals in a single job grade. The committee's judgment is required at each step: which attributes to consider, how many points to award for each attribute, how to weight points for different attributes, and where to draw lines between grades.' This reminds me of the way communist China used to be, and I reject it.
"I am saying that now, to get out of this recession, and to give just-in time hiring capability to our companies on the ground, Congress should quickly move against 'comparable worth' systems and allow firms to hire who they need, for what they need and when they need them, at rates based on their own decisions, not the government's. If elected, I would revisit Title VII to amend it if necessary to make clear that it is not an unlawful employment practice, not disparate impact, to adopt a market-based pay system, and reject a comparative worth system. That will help to grow the businesses, supply long-term employment to many more people and drive economic growth. Under current law, affirmative action is simply not legal where it is not directly tied to actual historic discrimination it is narrowly tailored to remedy.
"I know my opponents Betty McCollum and Teresa Collett share an interest in pitting women, or as Collett calls it, 'women's liberties' against the free market system. It's killing us to tie the hands of companies who want to make money and be productive, and this whole comparable worth bureaucracy, i.e. human resources departments loaded down with women working in committees manipulating these kinds of salary and hiring decisions are driving companies out of our labor market, drying up economic activity while at the same time creating massive unemployment. This is a variation on “illegal affirmative action” and I have seen cases where a huge company had a committee that announced that managers who passed up a woman when she could have been hired instead of a man faced a harsh review in his or her next performance review. I want to fight back against the man-cession because to compete internationally and just survive, we need to get rid of this pernicious social engineering and get back to basics. If you think that's fruitcake economics, I hope you'll study this issue further and consider the economic impact of your vote." 9-24-2010
Post-Analysis: Collett's position on "women's liberties" in abortion decisions appears to be an economic justification of abortion because of "pregnancy discrimination" in the workplace. It is part of a package of grievances that are driving companies to skew hiring decisions away from simple market-based calculations toward bureaucratic, expensive legal decisions that are job-killers.
In a separate letter I also noted that the simple fact is that many jobs go unfilled because employers can’t find the people to fill them. Just because someone is unemployed does not mean that every employer can hire them for their job. This fact creates an opportunity for Minnesota, because businesses in the 4th Congressional District can benefit from reductions in regulations and costs that are barriers to quick hiring of the right people. A White Bear Lake Chamber of Commerce questioner said they could not hire the people they wanted because of uncertainty about the tax climate and I’m sure that doubts about consumer spending also prohibit hires.
This is much more complex than it looks. Illegal affirmative action programs which cause corporations to avoid frivolous lawsuits by hiring a woman every time they can, or something like that, do inhibit hires, since the forced hire may not be a productive worker, and a great cost.