The Million Jobs Drive

We are developing a search engine that will have products ads with place of manufacturing information to provide the data so that we can all buy 5% more US made products and create a MILLION new jobs.

The unemployment rate was 7.2% a year ago. Now it’s 5.9%. Great! But the problem is that millions of people are still unemployed or underemployed.
If we all buy just 5% more US made products we will create a MILLION new jobs.
America’s problem is not that it does not work like China. It is that it no longer works like America. ~ Richard McGregor
American Made Matters

Today on Google, when someone searches for anything related to a product name, Google automatically populates most of the above-the-fold space on the Search Engine Result Page (SERP) with Product Listing Ads (PLAs). 

Google PLAs

What big-brand Pay-Per-Click (PPC) managers are finding out is that their PLAs are doing extremely well but this is at the expense of their regular text ads such as AdWords.

Frank DuBois

Frank DuBois

Product ads such as PLAs are proving to be very effective and we propose to create a search engine that will have products ads with place of manufacturing information. This information will be like the Kogod Made In America Auto Index assembled by Frank DuBois at American University’s Kogod School of Bussiness.

KOGOD MADE IN AMERICA AUTO INDEX TABLE KEY | Profit Margin, 6%: 6 if US company; 0 if foreign | Labor, 6%: 6 if assembled in US; 0 if foreign | Research & Development, 6%: 6 if US company; 3 if foreign and assembled in US; 1 if foreign and imported | Inventory, Capital, & Other Expenses, 11%: 11 if assembled in US; 0 if assembled outside of US | Engine, 14%: 14 if US produced; 0 if not | Transmission: 7 if US produced; 0 if not | Body, Interior, Chassis, Electrical & Other, 50%: 2013 AALA% divided by 2.

The Kogod Made in America Auto Index
Rank OEM Make Model 2014 AALA Profit Margin Labor R&D Inven-tory Enigine Trans-mission Body Index Score
1 Ford Ford F-Series Pickup 0.75 6 6 6 7 11 14 37.5 87.5
1 GM Chevrolet Corvette 0.75 6 6 6 7 11 14 38.5 87.5
2 GM Buick Enclave 0.72 6 6 6 7 11 14 36 86
2 GM Chevrolet Traverse 0.72 6 6 6 7 11 14 36 86
2 GM GMC Acadia 0.72 6 6 6 7 11 14 36 86
3 GM Chevrolet Equinox 0.7 6 6 6 7 11 14 35 85
3 GM Cadillac CTS 0.7 6 6 6 7 11 14 35 85
3 GM GMC Terrain 0.7 6 6 6 7 11 14 35 85

For F Series Score
One reason that it is important to challenge tech companies such as Google is because of their lack of diversity. As Michael Thomsen wrote in Forbes:

The lack of diversity at Google has… to do with the company’s core structure, which would remain bluntly antagonistic toward behavioral and political diversity….

Small businesses and startups are the backbone of the American economy, and according to a report done by Tim Kane for Kauffman Foundation:

[W]ithout startups, there would be no net job growth in the U.S. economy. This fact is true on average, but also is true for all but seven years for which the United States has data going back to 1977…. Startups create an average of 3 million new jobs annually. All other ages of firms, including companies in their first full years of existence up to firms established two centuries ago, are net job destroyers, losing 1 million jobs net combined per year.

As politicians go through the political drama of producing budgets, the truth of matter is that the only way to reduce the deficit is by reducing unemployment. According to an article written by Business Insider‘s executive editor Joe Weisenthal:

History is pretty clear on how you reduce the deficit: Get growth, and reduce unemployment.

We ran this chart earlier this week to show how nicely deficit/GDP and the unemployment rate correlated with each other. Throughout these decades tax and spending policies have changed a lot, but it clearly hasn’t mattered. When unemployment drops, deficit/GDP drops. When unemployment rises, deficit/GDP rises. Growth is the only deficit reduction policy that matters.

Unemployment vs. GDP chart

Given these facts, why do governments at all levels (local, state, and federal) continue to subsidize large corporations? As David Cay Johnston writes in an Al Jazeera America article:

State and local governments have awarded at least $110 billion in taxpayer subsidies to business, with 3 of every 4 dollars going to fewer than 1,000 big corporations, the most thorough analysis to date of corporate welfare revealed today.

Federal, state and local governments publish exhaustively detailed statistical reports on welfare to the poor, disabled, sick, elderly and other individuals who cannot support themselves. The cost of subsidized food, housing and medical care are all documented at government expense, with the statistics posted on government websites.

But corporate welfare is not the subject of any comprehensive reporting at the federal level. Disclosures by state and local governments vary greatly, from substantial to nearly nonexistent.

David Tepper

David Tepper

The top hedge manager, David Tepper, earned $1,057,692 an HOUR in 2012 — that’s as much as the average American family makes in 21 years!

Over the last thirty years, the United States has been taken over by an amoral financial oligarchy, and the American dream of opportunity, education, and upward mobility is now largely confined to the top few percent of the population. ~ Predator Nation by Charles H. Ferguson

The economic disaster was driven, Ferguson writes, by a combination of “very low interest rates, pervasive dishonesty through the financial system, massive lending fraud, speculation, demand for high yield securities, and not insignificantly, a squeezed American consumer desperate to maintain living standards, and told by everyone – including George Bush and Alan Greenspan, the brokers and the banks, that home borrowing was the way to do it.”

Charles H. Ferguson won an Academy Award for Inside Job.

Productivity is one way to measure the wealth of any nation. The top line above shows, we’ve been producing more and more per hour since World War II. The lower line shows average weekly wages (after factoring out inflation) for non-supervisory workers (who comprise about 85 percent of the workforce.)

Weekly Wages and Productivity Chart

From World War II to the mid-1970s, those two lines danced together. As productivity rose, so did the standard of living of working people. But something big happened in the mid-1970s — the government adopted a new economic philosophy based on deregulation and tax cuts.

The gap between those two lines represents an enormous amount of money — more than $3 trillion for 2012, for example. Where did it go? In the early 1970s, less than 9 percent of national income flowed to the top 1 percent. By 2007, it was nearly 24 percent.

The bankroll that stakes the high rollers like David Tepper comes from the productivity bonus that we are no longer earning.

It is clear as Jack Dorsey, creator of Twitter and founder and CEO of Square said at Techonomy Detroit:

[A] critical aspect of improving the U.S. economy is actually improving the small business economy and making it easier to start a business and to grow small businesses.

So what can local, state, and federal governments do to make it easier to start a business and to grow small businesses? We get an answer from Stacy Mitchell, Senior Researcher at the Institute for Local Self-Reliance. In an article she states the six steps that governments must take to support small businesses:

  1. Restructure the Banking System
  2. Close Corporate Tax Loopholes
  3. Extend Sales Taxes to Large Internet Retailers
  4. Get Corporate Money Out of Politics
  5. Cap Credit Card Swipe Fees
  6. Increase the Small Business Share of Government Purchasing

Why aren’t these steps being taken? Despite the talk, we must consider if politicians are really interested in economic development or is it more important for them to maintain the status quo? Aaron Renn addresses this issues in his post “Do Cities Really Want Economic Development?

Jane Jacobs once said that “Economic development, no matter when or where it occurs, is profoundly subversive of the status quo.” This, in a nutshell, is why policies and programs that might actually move the needle and generate economic development are not implemented. The politicians, power brokers, businessmen, non-profit executives, etc. all at some level benefit from the status quo. Anything that disrupts the status quo is a threat to them.

And as Michelle Long, Executive Director of BALLE in “The Incentive of Building Local” points out:

A recent New York Times special report described the squandered opportunities of economic development in local communities across America as tax incentives tallying more than $80 billion are handed out to oil and coal conglomerates, technology and entertainment companies, banks and big-box retail chains — usually with no concrete benefit, no jobs, no improved economic climate.

[Yet, b]uilding local economies from within — investing in the people and local businesses rooted right where they are — offers profound, long-term outcomes.

And the evidence is in: From Economic Development Quarterly to Harvard Business Review, communities with a higher density and diversity of local, independently owned businesses have more wealth, jobs, and resiliency than communities that rely on large corporations and big box retailers as “job creating” employers. Rather than funneling wealth into a few hands, strengthening local business ownership results in more wealth and jobs for more people, and greater personal accountability for the health of the natural and human communities of which we are a part.

study by the New York City Department of Transportation shows some additional ways to increase local business:

NYC DOT found that protected bikeways had a significant positive impact on local business strength. After the construction of a protected bicycle lane on 9th Avenue, local businesses saw a 49% increase in retail sales. In comparison, local businesses throughout Manhattan only saw a 3% increase in retail sales. Better walking infrastructure encourages retail strength, too.

In another example from NYC DOT’s study, retails sales increased a whopping 179% after the city converted an underused parking area in Brooklyn into a pedestrian plaza. Retail sales at businesses in the rest of the neighborhood only increased by 18%.

NYC DOT

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s