SEEKING EMPLOYEES VS JOB SEEKERS

A brief visit to a Staples store in Jackson, Wyoming revealed an ironic anomaly. We know that overall in the U.S., while the unemployment rate still hovers in the 7 ½ percent range, there are several million unfilled jobs requiring skills which are in very short supply.

This Staples store isn’t looking for specialized skills – it needs three or four people to stock shelves and ring up sales. Neither requires much education or any special skills beyond a rudimentary command of English and how a store works. Still, the store is having a hard time finding essential employees.

This example highlights the fact that it is not just a shortage of especially skilled people disturbing the equilibrium of our job market. There are a number of other rigidities, barely recognized much less addressed effectively, that are contributing to the problem.

People either cannot or do not want to move around the country to find jobs. Older people are stuck with homes they cannot easily sell or have dependants they cannot leave behind. Young people huddle with family out of fear of the unknown. And, in between, people everywhere are understandably reluctant to leave their present home or an existing job in search of a job somewhere else.

Indeed, new job growth remains the fundamental challenge to our historically high unemployment rate. The policy emphasis today on reducing stimulus spending is clearly a brake on both new jobs and the mobility required to find them.

There is no obvious, clear or easy fix to the mobility factor. But there are some ideas that perhaps should be considered. For example, people responded with alacrity to the tax credits offered to buyers of new cars when it was imperative to save the auto industry.

Perhaps something like that could be applied to seekers of jobs as well as employers of new people. Someone who moved to take a new job could get a tax break as an inducement to take the risk of moving. And, the employer of such a person might similarly get a tax break for inducing that person to move, which could enable that employer to pay a slightly higher wage, or to help with moving expenses.

That is just one, possibly controversial, idea. No doubt, if more people focus on this structural problem, more, and perhaps better, ideas might be forthcoming.

Still, the shock of seeing ordinary support jobs going begging prompted this call for more attention to a somewhat obscure point. This is vastly different from the problem of the non-existent jobs, or skilled jobs lacking candidates competent to fill them.

Clearly, there are people out there capable of doing jobs like those the Jackson Staples has open, but they simply cannot be found where those jobs do exist.

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Can You Have Your Cake and Eat It Too?

Mistakes occasionally turn out to be colossally successful. Can you organize your life to make that possible?

A number of years ago, there was a very well known and respected business man/ lawyer in Washington, D.C. who made hundreds of millions of dollars, primarily held in shares of the company he helped to found and lead. While the company prospered, and he served on its board, he set out to become a significant art collector. Over a number of years, he spent as much as fifty million dollars and established himself as an important collector with a great eye, as well as a major supporter of worthy causes that were very dependent on his help. His tax advisors told him to borrow the money for the collection, which he was well able to do.

(The reason for that was simply that by not selling shares and paying a capital gains tax and waiting for his ultimate death, when all the art and shares would get a new cost basis for estate tax purposes, he would be able to skip all the gains taxes. Smart advice! But…)

The BUT was the big mistake.

Suddenly and unexpectedly the company under his leadership hit upon hard times; its shares fell about 90 percent. He quickly found a new leader, the company soon began to recover, and in due course recovered all its lost value and a lot, lot more.

Meanwhile, the banks that had lent him the fifty million dollars grew worried, as the loans exceeded the value of the shares that had been pledged as collateral. So the banks did the typical friendly banker thing: they called the loans but gave him a bit of time to pay them off.

He then for the first time thought about selling art instead of buying it. He quickly discovered that his collection had become worth more than three times what he had paid. He selectively began to part with, at first, the paintings he least liked and was able to pay the bank well over two-thirds of what he owed within a month or so. By the end of six months he had repaid the loans completely and still had about three-fourths of his fabulous collection.

He had no doubt lost a lot of sleep and some face over the collapse of his baby. But, he never lost faith and never sold of a share of his company’s stock. His community support wavered only briefly. And, in due course over many years the company prospered beyond anyone’s imagination.

After his death, his home, the one that held the collection, became a marvelous pocket museum which has enriched countless visitors and all of Washington.

While this is a very grand example, there is wisdom and advice for everyone.

If a person spends their fun money in consuming expensive food and wine or boats, for example, when bad times come, as they do always predictably, there is less to placate demanding creditors. Diversification and spending primarily on things that can appreciate, AND that provide pleasure at the same time, is usually the safest way to use discretionary money that may be available.

The lesson in all this is that, after all, one can, if one is a bit lucky and shrewd, ‘Have the cake and eat it too’ if you follow the rules.

The person who inspired this story and will live on forever with greatest respect, particularly among people who live in Washington D.C., was David Kreeger, and his company is GEICO, now owned by Warren Buffett.

An Invisible Virtue of Great Grandparenthood

I have four children, all of whom, except for those normal moments of aberration, have been an endless joy from the beginning.

Those four children have, in turn, produced nine superb GRAND children ranging at the moment from 8 to 36 years old. Three are now over 30 and the other six are between 8 and 12.

We received some years ago the very old wisdom that the common bond between grandparents and grandchildren is a common enemy. And, we have observed, at least from time to time, that is absolutely true. It takes quite a lot of diplomacy to navigate those waters.

Parents are often quite proprietary about their children and do not much appreciate advice, even less help or interference. Parents are often quick to remember and point out flaws in their own upbringings; at least as they remember it, and claim to be remedying those slights and shortcomings in the way they raise their own children.

Then come along those absurdly delicious little creatures called GREAT (for two good reasons) Grandchildren (three so far, with the oldest being three). If you ever thought you knew the meaning of cute, forget it, the word takes on a whole new meaning with the arrival of the GREATS!

I have been reflecting on the dynamics of family relationships to understand the difference between grandchildren and great grandchildren.

I think I have spotted it.

Grandchildren are less on their guard with their Grandparents than with the “common enemy” parents, particularly when it comes to their children.

That leads to a much more relaxed attitude about the overall relationship with their grandparents. Our roles, as GG and PoPops, have been a super wonderful relationship with the little ones that come along quite late in life.

The only other explanation I can imagine is that modern society has evolved a more relaxed and inclusive environment of dual parenting which has changed all those relationships for the better.

In all events, one of the joys of an early and very long happy marriage is the arrival of those adorable GREATS in time to see further into the future!!