Business has picked up. Yet American companies are too nervous to step up hiring. The economy seems so gripped by uncertainties that many employers have decided to manage with the staff they have. They aren’t convinced their customer demand will keep growing. Or they worry that Europe’s festering debt crisis could infect the global economy. Or they aren’t sure what Congress will do, if anything, about taxes and spending in coming months.
This kind of sounds like a catch-22 doesn’t it? Employers won’t hire until the economy comes back but consumers can’t buy until they get jobs. I think the way this is usually broken is for some brave souls to just start bringing employees that they have previously laid off instead of asking their current employees to work more and more overtime.
But of course some companies spin it that they can’t hire because of some federal tax policy. I got a dose of that in our local paper it went something like this:
Although the tax would not go into effect until 2013, it has already caused Boston Scientific to build a $35 million research and development center in Ireland, instead of the U.S., while Cook Medical has changed its plans to build a medical device factory annually in the U.S.
The above statement came from the two mentioned medical device companies that have facilities in our small town. They are the major employer in our county and therefore have a tremendous amount of power in this area. Of course the local paper prints pretty much what they were given by the lobbying group representing these companies. The trouble with all the above quote is that the proposed tax is placed on the end-user and has nothing to do with profits or any other financial matters to the two companies! There is absolutely no reason to build a R&D facility in Ireland because of this 2.3% tax on the end-user. The tax will also not result in decreased sales of these medical device (primarily catheters) so shutting down plans to build additional factories makes no sense either.
Lobbying is quickly becoming one of the leading employers in this country. Of course the purpose of the lobby is to gain the maximum advantage for the company you represent. So when you decide to build a facility in a foreign company primarily because of cheaper labor you make sure that the decision to do that is placed on someone else and that is usually the government. When your estimates that you will build a new factory every year is changed due to competition or other sources then you make sure someone else gets the blame for your erroneous decisions.
The troubling thing about all of this is that our media seems just too lazy or just too understaffed to report the real causes for outsourcing jobs. They just take the lobbying handout and print it verbatim. I’m sure for our small paper they don’t want to be on the receiving end of what retribution might follow if they go against the company handout. In the past we have depended on the media to get to the bottom of these types of things but sadly that doesn’t happen anymore…
Another chink in the armor of the current Roman empire…