Monday, August 8, 2011

Job creation roundtable: A message to U.S. Rep. Jaime Herrera Beutler

Editor's note: U.S. Rep.Jaime Herrera Beutler, a Republican congresswoman from Camas, Wash., asked me to be part of a round table discussion on job creation, today. Here's my open letter to her, which I will be presenting during the session.

Dear Rep. Herrera Beutler,
The self-inflicted debt crisis that roiled Washington for the past several months did nothing to calm the fears of average Americans that our economy again is in trouble. When people have those fears they stop spending, pull their investments out of stock markets as they are doing today and hunker down. This in turn has a negative effect on the economy and becomes a self-fulfilling panic prophecy. The experts at Fidelity Investments say, "Panic is not a strategy," but that's what's happening.
My No. 1 message to you, Congresswoman, is this: Lower the noise coming out of Washington and give voters hope that our problems can be solved. If you want to see job creation in your district do your part to find solutions to our nation's economic problems by looking for common ground in terms of tax reform, entitlement expenditures and government spending. Yes, cut the debt, reform taxes and make the necessary tough trade-offs when it comes to Social Security and Medicare. But do it in a way that gives Americans confidence in the economy and in our government to solve problems. We are in danger of plunging back into recession if Americans stop spending out of fear.
Here are a few quick specific points:
- Job creation: Employers nationally and here in the Portland-Vancouver metropolitan area are creating jobs. We have seen employment in the metro area grow by 22,500 jobs in the past 12 months. Manufacturing is up 2,600 jobs. Trade and transportation, up 4,100 jobs, education and health services, up 5,000 jobs. In Clark County. Business and professional service employers have added 700 jobs in the past year. Health services are up 600 jobs.
We are losing jobs in government at all levels as budgets come in line with depressed tax revenue. Governments are doing what has to be done. My point is that job creation --- the essential ingredient in our recovery --- is perking along nicely in the private sector, despite cutbacks in government employment.
- Small businesses need support:  Small businesses are where most jobs are created. But these small business employers are being hammered by rising health care insurance costs and rising operating costs this year for such basics as gasoline and commodities. Give our small business owners stability so that they can plan for the future and feel confident enough to add workers. Tax reform and health care reform are needed and over due.
Women and retirement. And finally....there's a tsunami of baby boomer women headed for retirement in the next 10 to 20 years. Many are not prepared. These are women who have worked in jobs for the past 30 years in office administration, in retailing, in the service sector and as educators. These jobs did not pay big salaries and may have been considered secondary jobs to those of a male provider. Because many, if not most women out-live their spouses..... they've got to save more and plan to be on their own. Many unfortunately will have only Social Security to rely on in their old age. We need a national discussion about women and retirement planning. We need to create new incentives for women to save for retirement.
In your discussions about entitlements such as Medicare and Social Security, keep in mind the millions of women who have supported families, paid taxes but saved little for retirement..But who now will become a new challenge for our society. 36 million baby-boomer women will retire over the next 10 to 20 years.
Consider these facts from http://www.theendoftheamericandream.com/.
- According to one recent survey, 36 percent of Americans say that they don't contribute anything at all to retirement savings.
- Most Baby Boomers do not have a traditional pension plan because they have been going out of style over the past 30 years. Just consider the following quote from Time Magazine: The traditional pension plan is disappearing. In 1980, some 39 percent of private-sector workers had a pension that guaranteed a steady payout during retirement. Today that number stands closer to 15 percent, according to the Employee Benefit Research Institute in Washington, D.C.
- Over 30 percent of U.S. investors currently in their sixties have more than 80 percent of their 401k invested in equities. So what happens if the stock market crashes again?
-  35 percent of Americans already over the age of 65 rely almost entirely on Social Security payments alone.
-  According to another recent survey, 24 percent of U.S. workers admit that they have postponed their planned retirement age at least once during the past year.
- Approximately three out of four Americans start claiming Social Security benefits the moment they are eligible at age 62. Most are doing this out of necessity. However, by claiming Social Security early they get locked in at a much lower amount than if they would have waited.
-  After analyzing Congressional Budget Office data, Boston University economics professor Laurence J. Kotlikoff concluded that the U.S. government is facing a "fiscal gap" of $202 trillion dollars. A big chunk of that is made up of future obligations to Social Security and Medicare recipients.

Thank you for allowing me to be part of this discussion.
- Julia Anderson

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