Tag Archives: Obama

US free trade agreement to support 70,000 jobs

The term “Made in America” could soon take on a new level of importance with new free trade deals passed last week. The US Congress approved three new agreements with South Korea, Columbia and Panama on Oct. 12 that could help to preserve and create tens of thousands of American jobs.

By decreasing and removing tariffs on certain American products exported to the three foreign countries, 95 percent of US goods could become duty-free within the next five years. In what is considered to be the most groundbreaking deal since the North American Free Trade Agreement with Mexico and Canada in 1994, it could account for a $10 billion to $12 billion annual boost in US exports.

The trade agreement was originally drafted in 2007 while President George W. Bush was still in office, but it has been delayed by widespread Democratic objection. Touted by President Obama over the past few years, the deal is expected to benefit the economies of all countries involved.

Although criticized by many that are skeptical of any increase in jobs from exported US goods being eliminated by layoffs due to more competition from imported goods, the deal could benefit American workers in multiple industries, including automakers, farmers, ranchers, manufacturers and various small businesses.

The new agreement was backed by many different US organizations such as Ace, Citigroup, Pfizer, Caterpillar, General Electric, Whirlpool, General Motors, Ford and Chrysler.

The US auto industry is expected to profit substantially from the new deal with South Korea, where tariffs on imported American vehicles will be initially cut in half and eventually lifted entirely over the next five years. The agreement was promoted by both the UAW and Ford, which supported the cause through newspaper ads and a website.

The city of Detroit and the rest of Southeastern Michigan play an important role in the new pact with South Korea. Both President Obama and South Korean President Lee Myung-bak toured the Orion Township GM plant north of Detroit on Oct. 14, announcing their agreement and pushing its potential to boost the hard-hit area’s economy by creating jobs and increasing production.

The GM plant in Orion Township was reopened earlier this year to manufacture the Korean-developed Chevrolet Sonic subcompact, currently the smallest vehicle produced in the US.

Production of the Sonic was moved to the US from countries such as South Korea and Mexico. The new free trade deal includes a provision that will allow 40 percent of GM workers involved in manufacturing the vehicle at the Orion Township plant to earn more than the standard first-tier rate of $28 per hour.

General Motors currently exports the Chevrolet Camaro, the Cadillac CTS, SRX and Escalade to South Korea. Plans to export the Chevrolet Corvette are also in the works for the end of the year.

Detroit and the auto industry could benefit greatly from the free-trade pact with South Korea, and it is a welcome change for many in the area who have suffered from high unemployment rates and a depressed economy.

The new deal has been widely criticized because of its decrease on tariffs of goods imported to the US from other countries. Many Democrats believe that more imported goods will ultimately lead to fewer American jobs.

But the main advantage of the new pact is the fact that more US goods will be exported. In the long run, more products and services that America can sell overseas means more jobs created right here in the US.

 

WORKS CITED:

Abrams, Jim. “Congress passes 3 free trade agreements” Yahoo! News http://news.yahoo.com/congress-passes-3-free-trade-agreements-003629553.html  Accessed 10/15/11

Martin, Eric and McQuillen, William. SFGate http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/10/14/bloomberg_articlesLSZD6X6S9728.DTL  Accessed 10/15/11

Thompson, Chrissie. “Obama: New trade deal with Korea to support 70,000 American jobs” Detroit Free Press http://www.freep.com/article/20111014/NEWS15/111014037/Obama-New-trade-deal-Korea-create-70-000-American-jobs  Accessed 10/14/11

Obama’s American Jobs Act

On Sep. 8, President Obama unveiled his $447 billion American Jobs Act before a joint session of Congress. Obama spoke for more than thirty minutes, discussing his ideas for payroll tax cuts, long-term unemployment benefits, and infrastructure spending.

This week, economists have been analyzing the President’s proposal and how it will ultimately affect the economy.

Theoretically, the plans would put hundreds of thousands back in the workforce by next year, reduce unemployment rates and boost economic growth. One of the main initiatives discussed was a substantial Social Security tax cut aimed at providing an increase in direct income.

An extension of a tax cut implemented this year that reduced Social Security taxes from 6.2 percent to 4.2 percent would be extended to a new version that would drop the rate to 3.1 percent. This savings will theoretically result in more spending, temporarily spurring the economy.

The potential hurdle is that a Social Security cut would expire by the end of 2012, providing only a temporary boost in spending. In addition, there are few guarantees that Americans would use the extra money from their paychecks for goods and services, and even if they did, the US economy is largely dependent on foreign products.

The Buy American provision of Obama’s plan attempts to compensate for the potential consumer spending on foreign goods. The directive states that none of the money created by the American Jobs Act can be used for spending on infrastructure improvements unless all of the goods used in the project were produced in the US.

With at least $80 billion of the American Jobs Act proposed for spending on infrastructure improvements and the modernization of schools, the Buy American provision may keep the money spent on goods within the US. The White House also hopes that the increase in construction employment will further spur the economy.

In resolving the long-term unemployment dilemma (which includes 43 percent of out-of-work Americans), the act calls for a $4,000 tax break for businesses that hire applicants who have been unemployed for six months or more.

Additional provisions of the act include extending emergency unemployment benefits and providing aid to keep state and local governments from laying off teachers.

Political pundits predict that President Obama’s new plan will not likely be met with open arms in Congress. Republicans have criticized the act of basically re-hashing the old ideas that failed with Obama’s $825 billion economic stimulus plan in February of 2009.

Failing to provide substantial economic growth or tame the unemployment rate, that act was mainly successful in keeping the US out of a full-blown depression. Although the previous plan did manage to save or create millions of jobs, it could not compete with the rising unemployment rates across the country.

A common sentiment among those who oppose President Obama’s new ideas is that the top priority of the president is to preserve his own position. With the 2012 elections just 14 months away, holding his position in office may be on the top of Obama’s list, and some believe that his new plan is merely an attempt to gain the support of voters.

As temporary as the American Jobs Act will ultimately be, it’s a stepping stone in the right direction. It proposes ideas that both parties can hopefully agree on, but it still doesn’t address the larger concern: Spending doesn’t save an economy, so what will save America’s?

That question, at least for now, has gone unanswered by most politicians and economists.

WORKS CITED:

“Many economists say Obama jobs plan will help” Associated Press http://www.usatoday.com/money/economy/story/2011-09-09/obama-jobs-plan-economists/50336434/1

“Obama unveils $447B jobs package” USAToday http://www.usatoday.com/money/economy/story/2011-09-08/Obama-unveils-447B-jobs-package/50327464/1

“House Passes $819B Stimulus Package” FOXNEWS.com http://www.foxnews.com/politics/2009/01/28/house-passes-b-stimulus-package/

Obama to Unveil New Jobs Plan

If you happen to be one of the millions of unfortunate Americans who have been out of work for months at a time, you may have feelings of desperation and resentment towards the government for not taking further steps to remedy the unemployment situation.

As of right now, 14 million Americans are unemployed. This number does not include the millions more who have given upon on their job search after months of making no progress and those who have chosen to take part-time positions in order to fill in the gaps. Of the 14 million out of work, more than 6 million have been unemployed long-term. The current national unemployment rate is over 9%.

These numbers are definitely not music to the ears of the American working class. The Great Recession (apparently over) has given way to a weak recovery, and progress has been sluggish. In addition, a persistent fear among the long-term unemployed is that they might never find jobs again and have to live on government assistance for the rest of their lives.

It’s easy to point out the negative, but there is hope for the future. According to a recent article by the Associated Press, President Obama plans to unveil a new economic strategy to boost the economy and get Americans back to work in early September. Just after Labor Day, Obama will deliver a speech detailing his plans for helping out the unemployed and getting them back to the workforce.

Obama’s new bag of economic tactics will include:

  • Tax cuts to help the middle class
  • A build-up America construction program
  • Help for the long-term unemployed
  • Plans to tax the wealthy more in order to help cut the deficit

It may very well be that Obama is sweating about being re-elected for his second term. This makes sense. The 2012 election is right around the corner. According to the Associated Press, no incumbent in recent years has ever been re-elected for a second term with unemployment rates so high.

If you ask the Republican Party, they will probably tell you that President Obama is simply trying to get on our good side in order to be re-elected. But you have to take into consideration that times were tough when he stepped into office, and it usually takes more than three years to turn the entire economy around. Progress has been made; slowly but surely. The only way to go now is up.

So do not despair. There is hope on the horizon. We can only hope that Obama’s new jobs proposal will really help to ignite the economy and get us back to work in full force. In the meantime, it might be a good idea for the long-term unemployed to step in and pick up a part-time. As crazy as it might sound, it’s easier to find a job when you’ve already got one.