Getting back to even on jobs divides US leaders
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WASHINGTON America's sickly economy can be healed with jobs, jobs and more jobs. On that, everyone agrees. Figuring out how to produce them is what is stumping everyone.
Other than letting time take its course, Washington lacks a clear answer on how to create permanent new jobs on a national scale. Forecasters suggest it will take 20 million new jobs over the next 10 years just to repair recession damage and to keep pace with adult population growth.
Recent streams of bleak employment and economic data drive home the difficulty of the challenge.
As President Barack Obama prepares to tackle jobs issues in a speech to Congress on Thursday, deep divisions persist among economic policymakers on just how to spur job growth. The speech comes as national polls show a clear majority of those surveyed say they disapprove of the way Obama is handling the economy.
Lots of schemes have been tried or floated — first under Republican President George W. Bush and now under Democrat Obama. More than $2 trillion has been plowed into stimulus spending, loans and bailouts to banks, auto companies and other corporations, tax cuts for individuals and businesses, mortgage refinancing assistance and aid to state and local governments.
But so far, the needle has barely moved on unemployment, which has stayed near or above a frightening recession-level 9 percent for 29 months. It was 9.1 percent in August, same as the month before, with zero net job gains during the month.
"Neither side can make a definitive case that they really know what they're doing," said Douglas Holtz-Eakin, a former director of the Congressional Budget Office and top economic adviser to 2008 GOP presidential nominee Sen. John McCain.
Holtz-Eakin said that while different theories abound, economists have yet to satisfactorily explain business cycles, predict the duration of recessions or explain why some nations' economies grow while others do not. "It's complicated by the fact that we don't live in a textbook world and that, in fact, the government's capacity to do stuff is not infinitely wide."
Obama favors a mix of new short-term deficit spending on tax breaks and jobs programs, including ones for roads, bridges and other infrastructure, to keep the economy from falling back into a recession, combined with longer-term steps to trim ballooning deficits.
The need for infrastructure jobs is one of the few areas where there's anything approaching consensus. The concept has won the support not only of Obama, but such rival groups as the U.S. Chamber of Commerce and the AFL-CIO. The differences come in how to pay for it.
The administration is running out of ammunition to invigorate the economy before the November 2012 presidential election, especially with a Congress that seems geared to block any Obama measures that increase government spending. The Federal Reserve also has few options left, having kept interest rates at near zero for more than two years.
Republicans, who now control the House, overwhelmingly oppose further stimulus measures and are emphasizing deep spending cuts and eliminating regulations they claim discourage business expansion and job creation. Catering to the tea party movement, these Republicans say the private sector, not the government, is the engine of growth and should be allowed to function without government meddling.
Republicans have been out singing the praises of limited government and bashing Obama's economic policies.
With Congress now back from its summer break, Republicans will "focus on how we stop the federal government from making it so difficult for small business people to create jobs," said Majority Leader Eric Cantor, R-Va.
On Obama's left, liberal Democrats are clamoring for even more anti-recessionary spending than he has supported, saying measures enacted thus far have fallen short, given the magnitude of the downturn.
They can't all be right.
Some 16 million Americans are jobless, nearly half of them for more than six months. The number of unemployed and underemployed is some 25 million, or 16 percent of the adult population. There is but one job available for every four job seekers.
Yet there are flaws in both Democratic and Republican prescriptions for healing the economy and generating jobs.
For example, amid GOP assertions that getting the government's fiscal house in order will restore business confidence and private-sector jobs, recession-induced belt-tightening by the federal, state and local governments has resulted in widespread layoffs in the public sector.
"That's not really the way to move forward," said Lawrence Mishel, president of the labor-leaning Economic Policy Institute. For instance, even August's meager 17,000-job gain in the private sector was completely erased by lost public-sector jobs.
Many big corporations have ample cash on hand they could use for hiring, but there is little reason to do so. "There is an across-the-board lack of demand for workers," labor economist Heidi Shierholz said.
Why would a company invest to build a new plant and equipment if there's nobody to buy what is produced? It's a vicious cycle: Businesses won't hire because they don't have enough customers. But those out of work aren't shopping because they lack incomes.
On the Democratic side, many of the proposals expected to be announced by Obama, such as putting construction crews to work on road, bridge and other infrastructure projects and hiring workers to repair public schools, would be, by their very nature, temporary ones. And spending done now must still be paid for later, which is hard to do with a national debt soaring toward $14.7 trillion.
Obama also is putting emphasis on creating new jobs by exporting more, calling for approval of more free-trade agreements and seeking to double exports within the next five years. But with global markets soft, the world's top exporters — China, Japan and Germany — also hope to boost their lagging exports. It's a mathematical impossibility for all major trading partners to boost exports at the same time.
A major obstacle to job creation is the "mismatch between the jobs being created and the skills of those people who are unemployed," said Rob Shapiro, a former undersecretary of commerce in the Clinton administration. He hopes Obama will include job retraining programs in Thursday's speech, especially in the area of information-technology training for adults.
Citing unexpected weaknesses in the economy, White House forecasters a few days ago said unemployment will persist at around 9 percent well into the 2012 election season, revising their contention as recently as June that it would drop to about 8.3 percent next year. Some private forecasts are even gloomier.
Getting back to pre-recession jobless rates of below 5 percent — last seen in 2007 — may be a thing of the past.
"I think we'll get down to 5.5 to 6 percent unemployment and that will be the 'new normal,'" said economist Mark Zandi of Moody's Analytics. "It will take us to the mid-part of the decade to get there, but I think we will get there."
But Zandi, who has advised both Republican and Democratic lawmakers, said it also "depends on policymakers getting it roughly right."
It's the getting it right part that's such a tall order.

Sep 10, 2011 at 2:05 a.m.
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FOTH:
That's an EXCELLENT point on the WWII bonds!
That is how a war SHOULD be funded, because if the American public is not fully behind a war effort, it is ultimately doomed to FAIL!
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One has Woodrow Wilson (one of the nations WORSE presidents ever) to thank for the creation of the federal reserve banking system. If Teddy Roosevelt did not make the mistake of promising to only serve two terms (His VP; William Howard Taft would his place after Teddy kept his promise) we likely would have never had that disaster. After Taft's 1st term, Teddy went on to run AGAINST Taft as a 3rd party candidate (the Bull Mooses) and all it did was split up the majority vote, and got the radical racist-semi communist, Woodrow Wilson, into the office. One of the darkest moments in modern American history.
Sep 9, 2011 at 6:57 a.m.
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Good points, kiowamohican. On the other hand, if we just get rid of the Federal Reserve, we probably wouldn't need a balanced budget amendment. Interest rates would then be free to reflect the true cost of borrowing, which is automatically self-limiting. During WWII, Americans bought War Bonds to finance the war and, in so doing, expressed their support for the effort. When sovereign debt is on the open market with everything else, we the people will vote with our pocketbooks just as we do with everything else. Freedom rocks!
Sep 9, 2011 at 1:25 a.m.
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Super Dave:
You hit all the basic things right on.
Those are all, of course, Ron Pauls's positions as well.
Only thing I do not agree with is a balanced budget amendment. Believe it or not, what a BBA does, is simply shift power to federal judges, and away from elected officials. Because when $$$ is needed to be borrowed on debt (you can't just do nothing, and say sorry we don't have any $$$ left, if you have a 9/11, or major disaster). So what ultimately happens is "emergency" spending via borrowing, gets determined by federal judges. Plus having some manageable debt, is not always bad. For one, it is what many retirees invest in for a safe way to make a modest return. The whole bond market does have a place. Obviously it has gotten way out of hand now, to the point where so much debt has been created that the fed is simply buying the t-bills from $$ they create out of thin air (QE1-2).
Sep 9, 2011 at 1:15 a.m.
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congrats on landing the job at John Deere unclesmoothie...It's a good American fortune 500 company. They are doing quite well in this current environment of dollar devaluation, as they export a lot of their equipment over seas (a weak dollar, id of course great for foreign buyers). I wish you the best, hope things work out, and that you check in on the blog here from time to time.
Sep 9, 2011 at 1:07 a.m.
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"BTW, did you see Ron Paul being marginalized (once again) in the face of overwhelming evidence to the contrary? http://firstread.msnbc.msn.com/_news/201...
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The media will NEVER give Paul ANY attention, simply because he tells the truth, and MORE important, he does not have the MEGA $$$'s of the establishment behind him. Notice how the two MEGA $$ candidates just SUDDENLY (haha) became a TWO MAN RACE now..Of course; I predicted this well over a month ago, and told you all to bet Perry at about 4/1 odds BEFORE he even entered the race!! He is now a big favorite...I saw this coming a MILE AWAY...The GOP is BEYOND transparent. My wager should be easy $$$, but it truly is shows the sad state of things again. As the media, and oligarchy backed establishment just CHOOSES these front runners TIME AND TIME again.
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Should also be noted that some reporters at the debate reported that during a commercial break (not seen on live TV) Perry literally stormed up to Paul...GRABBING his wrist, and getting in his face. Guess Perry believes he is the true cowboy of Texas. Not sure why he was so upset at Paul going after his record in Texas? I mean the FIX IS IN for you Rick..Haven't they told you this yet??? All he really has to do is not come off as the hot head that he is..Not do a Howard Dean like implosion, and he's the GOP's man.
Sep 8, 2011 at 11:48 p.m.
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Thank you SarahB... ( even though i generally disagree with your views) I got hired at John Deere in East Moline Illinois...... building the big harvesters. I am just happy to be working again... I will be required to join the UAW after 90 days... out of curiosity , I will try to see if I have to join the union. I really don't care either way. I need to go back to a good job. Say, do you know anyone who wants to buy a house on Koshkonong? Out on Carcajou Point by Norm's Hideaway? Lemme know people.... I gotta unload it.Oh yeah.. the Packers won! God bless Mr. Busch and his magical Bud Light making machine.
Sep 8, 2011 at 8:17 p.m.
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Don't even bother with the Clinton signed it into law argument. I remember watching Clinton sign the GLD Act. He said at that time "This is a bad bill and it is only a matter of time before we have another depression." He signed it because he knew he did not have enough votes to kill it. The GLB act was being touted as a need to modernize our financial institutions. There are some basic laws of finance that never change over time they don't need to be modernized. It's simple math. So here we are 26 years later, with that law in effect and Republican trickle down economics being practiced and we are in another depression. It is a depression. Recession is just the current PC word to use.
Sep 8, 2011 at 8:08 p.m.
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If any of you would bother to do a little research as to what really and who really caused this mess you would find it wasn't Clinton, Bush or Obama or any president. It was the repealing of the Glass Steagal Act, put in place after the Great Depression to control Wall Street. In 1995 the Gramhm Leach Bliley Act pretty much decimated the Glass Steagel Act. This allowed the commercial & investment banking,and insurance industries to combine. How convenient for banks to conduct predatory lending from people who were not intelligent enough to know what was going on, making bad loans and then taking out insurance on those loans or purposely bundeling and decieving investors about their value. Works for them. No one has gone to jail for this. Although there is now an investigation underway.
Sep 8, 2011 at 5:37 p.m.
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When the Bush tax cuts took effect in 2003, the unemployment rate was 6.2%, now in the tenth year of those cuts, unemployment is 9.1%. Everybody should tear up their credit cards, stay away from retail stores and malls. Shut down both consumer spending and government spending. Everyone knows more spending won't create jobs. That's why we need more tax cuts. Vote Republican 2012!!
Sep 8, 2011 at 4:11 p.m.
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Here are the official results after Obama was elected and started stimulating the economy. They are:
1)First ever downgrade of U.S sovereign debt
2)Federal spending as percentage of GDP highest since WWII
3)Budget deficit as percentage of GDP highest since WWII
4)Federal debt as percentage of GDP highest since WWII
5)Employment lowest since 1983
6)Long term unemployment highest since the Great Depression
7)Home ownership rate lowest since 1965
Percentage of taxpayers paying income tax lowest ever(49%)
8)47% dependent on government-people who are receiving one or more federal benefit payments-highest ever in American history.
Sep 8, 2011 at 2:43 p.m.
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Obama's Guest of Honor at Jobs Speech
Obama brings guests to jobs speech
By David Jackson, USA TODAY
This is turning into a State of the Union-like event.
The White House has announced that nearly two-dozen guests will sit with first lady Michelle Obama to watch President Obama deliver his jobs speech to a joint session of Congress.
The list of business, labor, and political leaders includes GE chairman Jeffrey Immelt, AOL co-founder Steve Case, AFL-CIO President Richard Trumka; and Maryland Gov. Martin O'Malley.
House Speaker John Boehner, R-Ohio, will also have guests in the gallery: "More than a dozen private-sector job creators," according to a statement from his office.
Read more: http://content.usatoday.com/communities/...
Is Richard Trumpka the headliner again?
Sep 8, 2011 at 2:38 p.m.
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America Needs Jobs.....
http://www.youtube.com/watch?v=F6etfJgZQ...
Sep 8, 2011 at 1:49 p.m.
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Is BO going to talk about this "green jobs" plant?
FBI serves search warrants at Solyndra
FREMONT -- FBI agents served search warrants this morning at Solyndra, the Fremont solar company that abruptly closed last week, two years after receiving more than $500 million in federal stimulus money, an agency official said.
The search is part of a joint investigation involving the FBI and the Department of Energy's Office of Inspector General, said FBI spokeswoman Julianne Sohn, who declined to elaborate.
Read more: http://www.sfgate.com/cgi-bin/article.cg...
http://www.sfgate.com/cgi-bin/article.cg...
Sep 8, 2011 at 1:41 p.m.
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Youkillme,
Thank you for pointing out the obvious.
***
We dont have a revenue problem, we have a spending problem.
***
I am glad that you have finally seen the truth.
Sep 8, 2011 at 1:21 p.m.
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Here are the official results after ten years of the Bush tax cuts. They are:
1)First ever downgrade of U.S sovereign debt
2)Federal spending as percentage of GDP highest since WWII
3)Budget deficit as percentage of GDP highest since WWII
4)Federal debt as percentage of GDP highest since WWII
5)Employment lowest since 1983
6)Long term unemployment highest since the Great Depression
7)Home ownership rate lowest since 1965
Percentage of taxpayers paying income tax lowest ever(49%)
8)47% dependent on government-people who are receiving one or more federal benefit payments-highest ever in American history.
Vote Republican 2012!!
Sep 8, 2011 at 12:36 p.m.
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Superdave: Only in a perfect world. You want to see all hell break lose if and when our governement representatives are told that they have to have the same SS and healthcare that we have. They think that they are above us and entitled.
Sep 8, 2011 at 12:36 p.m.
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I remember back in 2008, anchor persons would be talking about anyone and everyone but Ron Paul, even as the background behind them was filled with his supporters and their signs and banners. It's a veritable media conspiracy.
Sep 8, 2011 at 12:26 p.m.
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Exactly right, SuperDave. And, with almost 157,000 votes so far, Ron Paul currently has 52.3%. That's more than all seven (7) other debaters COMBINED!
Sep 8, 2011 at 12:11 p.m.
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@FOTH: Yes, of course I realize some people get it. It's just that it pains me to witness conversation about what the gubmint should be doing to create jobs when in fact that's not the proper purpose of gubmint. That and they're incapable!
Thanks for the Ron Paul link! I didn't get to watch the debate, but saw some YouTube clips of his answers. I also observed how the questions he got were selected and phrased in such a way as to invite a silly answer, but it didn't work MSNBC! Ron Paul is the one consistent bright light in a sea of dim bulbs. Clearly, he strikes fear into the heart of all statists :)
Sep 8, 2011 at 10:42 a.m.
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Not everyone is missing that, SuperDave. Some of us not only understand what you just wrote but see every one of those things as an obvious no-brainer. I would only add, doing that will be highly unlikely without first implementing instant run off elections.
BTW, did you see Ron Paul being marginalized (once again) in the face of overwhelming evidence to the contrary? http://firstread.msnbc.msn.com/_news/201...
Sep 8, 2011 at 10:27 a.m.
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Here's what everyone seems to be missing. It's not the responsibility of government to create jobs! Real jobs are only created by the private sector. The best thing that government can do is GET OUT OF THE WAY.
How is government in the way? High taxes, high levels of regulation. For an employer to consider hiring an additional employee, she must first consider what that will cost her in terms of pay, benefits, unemployment insurance, etc. To the extent that many of these are mandated or unknown (such as Obamacare), and with the state of the economy and therefore demand for products and services down, the employer logically concludes that she cannot afford to hire at this time.
You want to see the econmy flourish? Abolish Obamacare. Abolish the IRS and institute the FairTax. Abolish fractional reserve money and allow the economy to create real money, backed by gold. Abolish useless government entities, such as the Dept. of Education, Fanny and Freddie, HHS, Treasury, Interior, Agriculture, Commerce, Labor, Energy and make those people get real jobs. Make the President, Congress and the Justices of the Supreme Court subject to the same laws, and the same Social Security system, and the same healthcare as the rest of us. Pass a balanced budget amendment. Eliminate all foreign aid. Bring all of our troops back to the US, and put them to work as neccessary securing our borders.
I could go on.....
Sep 8, 2011 at 10:08 a.m.
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Pastafarian: I enjoyed your earlier comment and was expanding on its theme.
Sep 8, 2011 at 9:39 a.m.
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Well,on the bright side, I got a call from John Deere in Moline Illinois for a job interview. I would love the opportunity to work for them, but do I want to leave Wisconsin? I have a crappy job I work nights and I do custom chrome out of my basement. I do all the polishing and prep work and send my stuff to a plating company in Rock Island. The owner of that company is the one who hooked me up with John Deere. Yes, if I am offered a position I will take the job. Ya gotta do what ya gotta do. To anyone else out there who is looking for a decent job: keep your head up and use all the resources you can. Don't be afraid to ask anyone. You never know who has a connection you can use. There are some good jobs out there, but you may have to move to get one.
Sep 8, 2011 at 9:33 a.m.
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So that's what you were talking about FOTH. I hadn't been paying attention.
Sep 8, 2011 at 8:58 a.m.
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It is hard times indeed. My best thoughts go out to those of you who have shared your stories today.
Sep 8, 2011 at 8:13 a.m.
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onedayatatime: If you ask in a non-threatening off-the-record environment, some HR people will admit strong disincentives in hiring older folks. There are many reasons. (Especially for engineers, who are considered over-the-hill at age 40.) A major reason is that their cost for your health insurance is 4 or 5 times higher than for a twenty-something. Another reason is WHY it is 4-5 times higher. To paraphrase kiowamohican, why would anyone hire some geezer unless they absolutely had to? (I'm older than you so please don't shoot the messenger.) Just ignore anyone who says it's all your own fault. Those are the very same people who believe that they are the only true victims of an economy that was single-handedly wrecked by Obama, while all of your problems can be attributed to a bad attitude. You probably won't catch them writing that all in one post, though. ;-)
Sep 8, 2011 at 2:20 a.m.
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Really do feel for some of the posters who commented.
It's really a shame when you have the situation that now exists, because it simply empowers corporate America MORE. I mean they know the job pool is vast, so they can be ultra selective, discriminate a vastly, and pay much less in wages with so much excess in the supply pool (of people looking for a job). Plus they can treat their current employees like dirt, because most are scared to death to quit, or won't be able to find a different job in this mess. It's really a sad state of affairs that has all been the result of HORRIFIC fed policy, and sell out legislative policy, over the past decade or so.
Sep 8, 2011 at 2:10 a.m.
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"The administration is running out of ammunition to invigorate the economy before the November 2012 presidential election, especially with a Congress that seems geared to block any Obama measures that increase government spending. ******The Federal Reserve also has few options left, having kept interest rates at near zero for more than two years."**********
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The author of this article is CLUELESS.
Big Ben is NEVER out of options...
It's called QE3 baby...
Then QE4-5-6-7-8-9.
No worries folks, the fed will rescue us with more QE...I mean it's worked GREAT so far. Corporate profits are at ALL TIME RECORD HIGHS! Have to keep that trickle down-wealth effect going STRONG! I mean it's it's working GREAT!
Sep 7, 2011 at 10:25 p.m.
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My husband was told at an interview that the boss was looking for younger people. So, yes, there is age discrimination going on. Too bad my husband did not report the company that's here in Janesville. I really believe that people should be able to take a recorder with them on an interview.
Sep 7, 2011 at 10:18 p.m.
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onedayatatime: Keep your chin up. My husband is 56 also and is going thru the same thing. A lot of good it did going back to school to learn a trade. Worked for a total of 3 months since he graduated. Went for another interview in Milwaukee today. Still no job. You are absolutely right that the corporations want more but want to pay less. Like I said, it's all about the money. And so sorry, but there is very little compassion left in this world. I do believe, though, that people will reap what they sow. Greed is a bad thing.
Sep 7, 2011 at 7:54 p.m.
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bebe...."the left on these posts is just complaining/class warfare/entitlement demanding rhetoric-get educated and get a job!"
I have 2 Associates degrees and a B.S. in Mechanical engineering. I was unemployed for 3 years! I am only working now because I took a 60% cut in pay. When your 56 and someone offers you a job, you take it. That's what employer's are counting on. You have to be blind or have your head so far up your a$$ to not see wages are being driven down in the U.S. I am now making the same wage I made right out of college 20 year's ago, but my employer is getting 20 years of experience.
IS THERE NO COMPASSION LEFT IN THIS COUNTRY???
Sep 7, 2011 at 7:46 p.m.
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grandy's...
sarahb1: questions to answer, Who, What Where and When.
Who= me
What = engineering job
Where = Beloit
When = last summer
I had 3 phone interviews that went very well. I was called in for a face to face interview and was told it was just to meet the people I would be working with. Within 2 hrs after the interview, I received a rejection email stating they decided to go with an applicant that more closely matched thier requirements. During one of the phone interviews I was told I had outstanding credentials and had been highly reccomended for the job. I didn't answer any questions any differently than how I had answered them on the phone. I wonder what changed? I didn't go to college until my mid 30's so on paper I appear much younger than my actual age of 56. As far as law suits...how do you prove it unless you secretly record the interview?
Sep 7, 2011 at 7:04 p.m.
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The only way to get the jobs back to the US is to repeal Nafta and to tax the coporations that take jobs out of country to the max.
Sep 7, 2011 at 6:32 p.m.
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I would gladly move if I have to so I could find a job elsewhere. The problem is my house. Can't sell it for what it's worth. I have lost all equity I put into my home. And to age discimination, yes it is very much alive. Problem is many older people are more than qualified because they know what it is to work hard and do their job well. Problem is companies don't want to hire people who are qualified or OVER-QUALIFIED (a word created so companies can find someone who will take less pay) for the job. They want to hire someone they can pay minimum wage to. No wonder everything is made cheap and of poor quality today. It's all about the money and how much more in profits can be made. Not quality of the product or quality of the employee. And believe me, some employers will tell you to your face that they are looking for younger employees.
Sep 7, 2011 at 5:59 p.m.
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Obummer, who has never had a real job in his life, is going to tell you tomorrow how to find a job.
Sep 7, 2011 at 2:51 p.m.
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What I would say Sarah is that many at that age are over qualified in some cases, and the fear of employers is that if they hire that person , as soon as the markets/business picks back up they are gone and the investment in developing resource is as well. So its not age dicrimnation, its more like self preservation.
Sep 7, 2011 at 12:52 p.m.
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And average CEO pay is around 10 million - whats your point?
Sep 7, 2011 at 12:19 p.m.
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Teamsters’ Hoffa Made $300,000 in 2010
http://cnsnews.com/news/article/teamster...
I don't think I could stand on a national stage and say the words he said.......even for $300 K.
Sep 7, 2011 at 12:18 p.m.
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The conservatives are working minimum wage and trying to drag everyone down to that level, because it's tough for them so should be tough for everyone.
Sep 7, 2011 at 12:10 p.m.
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In mid August, the President told us he would announce his jobs plan after his Martha's Vineyard vacation. How does that make sense ? "If he had a plan already, then why wait weeks to get it rolling; and if he had no plan, then why take a vacation – better to get to work on the plan since you just told the whole world you had one." www.timnerenz.com/2011/08/problem-solved...
Sep 7, 2011 at 11:46 a.m.
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So all the conservatives are working?
Who'd-a-thunk it!
Sep 7, 2011 at 10:15 a.m.
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Do you folks ever get tired of posting the same tired lines? Guess not.
You want a job? Go to N. Dakota, N. Mexico or Texas. You can't sit back and wait for something to happen in the midwest, because it isn't going to happen here. Walker has no more power over "creating" jobs than the easter bunny does delivering easter eggs, same goes for Obama. Yes, you'll have to move your family, yes, you might have to be away from your family, but get over it, or stop complaining.
Sep 7, 2011 at 10:13 a.m.
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It's clear that what we need is more stimulus and regulation. I mean, it's worked so well that we need even more, right?
These lefties are pathetic.
Sep 7, 2011 at 10:03 a.m.
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How about that hope and change thing..... oh thats working well. I hope Obama would change..... That way all that are looking for jobs might actually find them they are just hoping he sees the light.
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