Jobs, Jobs, Jobs - Will Anything in Obama's Budget Help with Jobs?

After the Massachusetts election the Democrats went to great length to let us all know that they "get it," and it's time to focus on jobs. We would all naturally expect Obama's latest budget to include several provisions to spur job growth.

The natural place to look was in the section for the Department of Labor. After all their mission statement includes the phrases "advancing their opportunities for profitable employment" and "helping employers find workers." So let's take a look at their fact sheet and see what it says.

Breaking Down the Numbers - Should we be worried that they can't even add right?
The total for discretionary spending is just under $14 billion if you read their total on the Department of Labor Fact Sheet or just over that if you actually add up each additional line. The printed amount (as of midnight 2/2/10) is $13.967 billion, adding each line gets you $14.206 billion, did these guys pass accounting or even math?

The good news is that they are planning to spend about $239 million less than last year, but the bad news is in the details. If you break down each line item from Obama's Department of Labor budget into five basic categories you will get:

Programs to help people find jobs:
$7.3 Billion (51% of budget)

Unemployment Insurance Admin:
$3.6 Billion (25% of budget)

Worker protection programs:
$1.7 Billion (12% of budget)

Labor (Union) Related Programs:
$226 Million (2% of budget)

Administration and other:
$1.4 Billion (10% of budget)

Grand Total:
$14.206 Billion

So not bad, just over half the budget is for helping people find jobs. But wait, I forgot a few columns, take another look:

Programs to help people find jobs: 2% DECREASE
Unemployment Insurance Admin: 10% DECREASE
Worker protection programs: 8% INCREASE
Labor (Union) Related Programs: 12% INCREASE
Administration and other: 9% INCREASE

That can't be right, are they really DECREASING the amount spent to help people find jobs?
That's what it looks like. To find that number I included:

- Training and Employment Services (up 3%)
- Employment Service/One-Stop Career Centers (No Change)
- Office of Job Corp (No Change)
- Community Service Employment for Older Americans (Down 27%, Sorry Grandpa)
- Veterans Employment and Training (Up 2%)

These are clearly the right items, but where's the money? If they were serious about growing jobs, you would think this is where it would be. Well let's see what really happened.

Watch Out Employers, Here Come the Feds!
Not a single worker-protection related item was reduced in Obama's latest budget. In fact they were all increased an average of 8%. These are items such as OSHA, Wage and Hour Division, Office of Workers' Compensation programs, etc. Who can argue with programs to protect workers? Sounds nice doesn't it?

Don't forget that expanding all of these groups means more regulations and red tape for our businesses. In case you forgot, those businesses are the people we work for. If we hassle them do you think they are going to be in the mood to hire more? More employees = more potential liability. How will they react? Maybe they'll hire less or maybe they will outsource to other countries. No matter what it's not going to encourage job growth.

The Big Winner - Big Labor. You're not really surprised are you?
Big labor does tend to benefit from the scrutiny mentioned above, but they also have a few of their own goodies in the budget. Here are a few provisions that will have the unions laughing to the bank:

Protections Against Outsourcing to Foreign Countries
The single biggest increase in the budget is for the Bureau of International Labor Affairs with a whopping 24% increase. What do they do? They are the ones that focus on labor conditions in foreign countries where American businesses do business. In other words, they find barriers to outsource to these countries.

Yes, sometimes it is because of labor conditions that we consider horrific now, but don't forget that is part of the "developing" part of "developing countries." We went through our own era of that during the Industrial Revolution. Is it really compassionate to not allow other countries to do the same thing and let them work their way out of poverty?

More Man Power to Investigate Union Complaints and Preparations for Card Check
Another interesting increase in Obama's budget is the 10% increase to the Office of Labor Management Standards. This would be the office that investigates labor complaints and more importantly handles the certification of new unions. This clearly is preparation for the "Card Check" legislation that Obama will be pushing soon. The short story on Card Check is that it is a very quick and dirty way for unions to strong arm their way into a workgroup by putting employees on the spot. It removes secret ballots and replaces it with simple signature cards.

Less Manpower to Handle Visas for Foreign Workers

One of the decreases is especially telling. There is a 3% decrease in the group that handles work visas. Less spending = less visas = less foreign workers=Union Support, that's my theory anyway.

What most people don't realize is how hard it is to hire a foreign worker now. I've been through the process twice as a hiring manager, and it is very long and expensive. The main thing to know is that you can only sponsor a visa if you can prove that you could not find any qualified American worker. So what happens if these jobs can be filled? Well maybe the work itself will go overseas, along with all the supporting jobs. Maybe it will just go unfilled or maybe filled with somebody not qualified. Either way, the company and the economy suffers.

One Hundred New Agents Looking For Potential New Union Members
There has been a historical battle between what is considered an employee versus a independent contractor. Unions view independent contractors with contempt mainly because they can't be organized and pay dues.

The Department of Labor wants to add $25 million to hire 100 additional enforcement agents to make sure that proper classifications are made. They claim this hurts the treasury because unemployment, social security, and Medicare taxes don't get collected. While they are right in that statement what they don't tell you is that independent contractors aren't eligible for unemployment (why pay if they won't collect) and they would have to pay a self employment tax, which is designed to replace payroll taxes. Well so much for affecting the treasury, which means only the unions are going to benefit from this one.

Other Odds and Ends - More Costs, No Real Benefits
Of course the second largest category increase is in general administration which is the "big government" trademark of the Democrats. There are a few other provisions such as helping states provide "Paid Leave" funds, but it only covers the establishment of the programs. I'm sure we'll here later how much the programs will actually cost. Finally, the retirement account initiative from the Middle Class Task Force is included. You can find more information about that in my other article on the Middle Class Initiatives, which discusses those initiatives.

Sources:

Department of Labor: http://www.dol.gov
Department of Labor Budget Report on WhiteHouse.gov: http://www.whitehouse.gov/omb/budget/fy2011/assets/labor.pdf