American Elephants

Why Hasn’t The Economy Recovered? Here Are Answers. by The Elephant's Child

When a business wants to hire someone, they would prefer someone who has done the same job previously and successfully. Someone who wants to step up to your  company. They would be charming, have an excellent resume, excellent academic record with good grades in an applicable field, and a stunning list of notable accomplishments.  Good luck with that.

There is a cost to a bad hiring decision. According to a study by the Society for Human Resources Management, it could cost up to five times a bad hire’s annual salary. The higher the person’s position and the longer they remain in that position, the more it will cost to replace him or her. Recruiters say that if you make a mistake in hiring and recognize the mistake within six months, the cost of replacing that employee is still going to cost two and one-half times the person’s salary.

For every two students that U.S. colleges graduate with STEM degrees (Science, Technology, Engineering and Math) only one is hired into a STEM job. Half of all graduates are not hired into STEM positions. Thirty-two percent say it is because IT jobs are unavailable, 53 percent say they found better job opportunities outside of IT occupations. These responses suggest that the supply is larger than the demand for them in industry. The annual inflow of guestworkers amounts to one-third to one-half the number of all new IT job holders, in spite of stagnant or declining wages.

The immigration debate is complicated and polarizing, but the implications of the data for enacting high-skill guestworker policy are clear: Immigration policies that facilitate large flows of guestworkers will supply labor at wages that are too low to induce significant increases in supply from the domestic workforce.

Only about of a third of the IT workforce has an IT-related degree. 36 percent of IT workers do not hold a college degree at all. Only 24 percent of IT workers have a four-year computer science or math degree. But then, Bill Gates was famously a college dropout. I searched for “hiring tests for high tech jobs,” and the variety of tests — aptitude, skill, social, drugs, personality — and some companies have devised their own tests of intelligence and thinking to weed out the unsuitable.

Meantime, the government is stepping in to promote “fairness.” The Equal Employment Opportunity Commission has said it will crack down on employers who use the criminal histories of job applicants to discriminate against them illegally. The EEOC’s new guidance requires companies to establish procedures to show they are not using criminal records to discriminate by race or national origin. There’s some leeway for criminal convictions that are “job-related for the position in question and consistent with business necessity.”

President Obama on Friday formally announced a deal with some of the nation’s largest companies to institute new hiring practices that do not “disadvantage” those who have been jobless for several months or longer.

Companies such as AT&T, Apple, Wal-Mart, Ford and others have agreed to the president’s initiative which will also extend to the federal government and its interview process.

They just need that chance, somebody who will look past that stretch of unemployment, put in context of the fact that we went through the worst financial and economic crisis in our lifetime which created a group of folks who were unemployed longer than normal,” Mr. Obama. “All they need is a fair shot … giving up on the unemployed will create a drag on our economy we cannot tolerate.

The agreement means that companies will not favor one prospective employee over another based solely on the length of time each has been unemployed. On Tuesday Mr. Obama used executive power to hike the minimum wage from $7.25 to $10.10 for all federal contractors.

President Obama’s closest adviser and liaison with corporate America is Valerie Jarrett, although she has no knowledge or experience to help her understand the concerns of those with whom she is dealing.  Financial sector insiders and corporate executives reportedly stopped having meetings with the White House because any such meetings were pointless. They found that Ms. Jarrett was interested only in pushing the administration’s agenda, rather than engaging in any kind of dialogue about how to foster better economic  growth. But the White House does not want input, nor do they want to work with business. They want obedience.

If you want to know why the recession has dragged on so long, why the economy has not come roaring back, the answers are all to be found here. Everything is best fixed by a government policy emanating from the White House. They know better, and don’t have to listen to the people.

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