I do not for one second believe that high U. S. corporate tax rates (and the depreciation schedules) are impeding American businesses’ propensity to invest, as claimed by Alan Daley in his post at RealClearPolicy:
If President Trump and the Congress move forward with tax reform, U.S. businesses stand to gain trillions of discretionary dollars from lower tax burdens, repatriation of their net profits held overseas, and incentives that would permit the expensing of capital investment.
which is sophistry. Increasing the incentives is not identical to effecting. I think the primary effect of those taxes is to impede the companies ability to “repatriate” foreign earnings to distribute them as executive compensation in one form or another.
However, rather than fisking the entire post, I want to draw your attention to these observations:
It must be emphasized that we do not have a headcount shortage of willing workers; we have a skills shortage. Unfortunately, a “can-do†attitude is no substitute for the right skills.
and
Outside of STEM, however, there are tight markets for qualified physical and occupational therapists, nurses, machinists, electricians, and welders. Most of these jobs require that a suitable candidate have at least a post-high school certification and supervised experience or apprenticeship.
which support a point I’ve been making for decades and at The Glittering Eye for more than a decade. If there are no jobs for American junior engineers or apprentice welders or electricians, eventually there will be no senior American engineers or master welders or electricians.
The real underlying problem is the unwillingness of American companies to bear the training costs that were once assumed to be a cost of doing business. I believe that lack of willingness derives from their conviction that they can get the people they want by importing them from abroad.
To add to that, there’s been a move by businesses away from entry-level jobs to internships, most of them unpaid. What’s not to like about free labor from an educated worker?
It must be emphasized that we do not have a headcount shortage of willing workers; we have a skills shortage. Unfortunately, a “can-do†attitude is no substitute for the right skills.
That’s an excuse. I’ve noted that this argument is used to cover all sorts of discrimination based on race, age, sex, etc, as in “she is brilliant and multi-lingual, valedictorian from one of the best schools, but there’s a skills mismatch.”
All this in a country in which bicycle mechanics invented aviation, a dumb, poorly educated watch repairman taught the world how to make cars, and an uneducated telegram operator got 1200 patents in electrical technology. Even Hedy Lamar got a patent, for Chrissake, in spread-spectrum radio technology.
Andy:
It’s worth mentioning that unpaid internships are classist and, given the history and the way class membership is delineated in the U. S., racist as well.
None of the jobs cited above would have unpaid internships. At least on the nursing side, I think it should be acknowledged that there have also been times when the market was saturated with nurses. This just goes in cycles where there are too many and then not enough. Three years ago I had nurses begging me, literally, for work. Now, I may have to offer signing bonuses.
Steve
Again, I must live in a different world. The vast majority of entry level jobs I know of are paid, and on the job training is routine and a fact of life. There are few plug and play hires. Maybe it’s different in some fields.
As for taxes, I think the notion they don’t enter investment decisions is just flat damned wrong. But in addition, most tax benefits in the absence of investment opportunities would flow through to shareholders, not management.
Where I work, we are constantly hiring children straight out of college, with their shiny little computer science degrees, and then training them to be software engineers. Takes a few years for them to be useful.
They generally quit two years later, and are hired by our competitors. We should really try to keep the little rugrats longer, rather than just burning through them, but what can you do?