This wasn’t supposed to happen. The week before Labor Day is notoriously slow with few, if any gains or losses for the week, but somebody forgot to tell that to the markets. It would appear from the upside action that we are once again going to run the S&P 500 Index back to the top of the range at 1,130. Whether we break that upside resistance remains to be seen.
I telegraphed readers that we could have a bounce this week but even I was not expecting this much upside.. The rally kicked off on Wednesday, the first day of September, and in just three days the indexes have gained more than 5%. Ostensibly, the trigger for this melt-up was some manufacturing data out of China and a positive economic report from Australia that indicated the world’s economies were still growing. If you believe that, I have a bridge I want to sell you in Brooklyn.
Although it’s tough to prove, I believe the real story behind the market’s move is that this week’s unemployment numbers were leaked to The Street earlier in the week. This would not be the first time (or the last) that government sources have dropped insider information on their pals within the financial sector. I guess when the government breaks the law its okay.
August’s job report indicated that the private sector added more jobs than anyone expected last month, while the Labor Department revised their previously announced data showing even bigger private sector gains in employment were made in both June and July. That’s good news for a market that is overly focused on weekly, if not daily, economic and unemployment numbers.
I’ve recently noticed that everyone has a pet idea on how to reduce the unemployment rate. Everything from tax credits to tightening immigration to make work programs FDR-style have been floated, discussed, critiqued and floated again. So I guess I’ll throw in my two cents, given it’s the Labor Day weekend. My idea, however, wouldn’t cost the taxpayer an extra penny.
Let’s say you’ve been out of work for a year. You are on unemployment but bored to tears, feel like a failure and have just about given up sending out resumes. Why not offer the next prospective employer a deal. You’ll work for free over the next six months; that’s right, for free, but after six months, if you are doing a good job, the employer pays you for the last three month’s work and hires you.
Once agreed, it’s all up to you. You’ve got six months to show your stuff– how hard-working, smart and dedicated you are. The worst that can happen is that you are let go, but in the meantime, you might learn a new skill, tool or trade and possibly unearth other job opportunities.
The employer, meanwhile, receives an added boost to productivity in the form of free labor (minus the start-up costs of training you). That could generate more business for the company in the form of sales and profits, which could help grow the economy. I tried out my idea on several small business owners in the Berkshires.
“I would go for that hands down,” said the head of a local engineering company.
“Count me in,” agreed the boss of a construction crew, “and if the person showed any sort of initiative, I’d probably pay him for the six months.”
Every one of them said it was an idea they would support.
Of course, I recognize the issues involved. On unemployment, you are supposed to be looking for work, not working for free. There would be questions about insurance, possible legal hassles, etc. But possibly the biggest obstacle to overcome is the American attitude that we deserve a job, as opposed to working for one. It is not our God-given right to be employed.
There was a time when I desperately needed a job. Straight out of Vietnam and the Marine Corps, I was paying my way through college in Philadelphia while working on a journalism degree. Borrowing a suit coat and tie, I wrangled an appointment with the editor of the city’s largest newspaper.
“If I don’t get a front page story in the next three months, I’ll walk,” I offered.
The hard-bitten boss of the city desk agreed and subsequently put me in a department that had never published a front page story in the 100-year history of the paper. Three months later my front page story sold out the evening edition. I got the job and a journalism award for the best human interest story of the year. It can be done. Try it.