Millard Grimes: Just following the money trail

June 2, 2014 

The cold, clammy hand of the economic recession still clutches too many Americans, after nearly eight years of uncertainty, hope and pain.

Figures on unemployment look better; on employment not so much, and there is a difference.

In the Atlanta metro area, for example, the latest report finds the unemployment rate at 6.5, a full percentage point below the national rate, and best Atlanta rate since July 2008. Employers hired 18,000 additional employees, but total employment is still below the total in July 2008.

The largest number of new jobs is still in the hospitality industry, which means lower paid. The major sector that has the worst decline was government jobs, which cover a broad range of fields from teachers to construction.

Oratory in the recent election was not encouraging. The candidates looked at polls and their talking points instead of employment figures, and promised to cut government spending. That usually means even fewer government jobs and lower wages. That's been happening for the past 10 years. According to the Georgia Department of Labor, 104,000 Georgians were looking for jobs in April 2004; this April 178,000 were still looking, and that doesn't count the people who've just stopped looking.

Statistics are just cold figures. Most of us sense the economic situation without having to look at the color-the-numbers account. The economy is better but needs help from both the private and public sectors.

Hewlett-Packard, one of the nation's largest industries, announced last week it is increasing the total number of jobs to be eliminated this year to more than 34,000. HP's CEO said the company is becoming "more nimble, low cost and partner-centric."

Less of a job creator than a job eliminator, which is the case with too many companies, HP also reported that net income in the first three months of 2014 increased by 18 percent to $1.2 billion.

Meanwhile, other companies are putting billions of dollars into buying out other competitors. Pfizer is offering $119 billion for a British drug company, Astra Zenaca. Sounds like a lot, but the real driver of the deal is a huge tax advantage.

And few Americans seem to notice or complain that their tax money is being used to swing these deals that are ridiculous and frankly anti-American activities of private enterprise which is helping keep the overall economy in the tank.

One deal that really roils the imagination was reported in the Atlanta Journal-Constitution recently. Ocwen Financial Corp. is paying its chief financial officer to move to the Virgin Islands. As an incentive to make the move, the CFO will receive a $100,000 relocation bonus, a $400,000 salary and 10,000 shares of Ocwen stock. Ocwen, like many American companies, is incorporated in the Virgin Islands for tax reasons, although most of its executives live in Atlanta.

An Ocwen spokesman said, "It just makes sense for certain Ocwen executives to be based in St. Croix."

So that's one less employee in Metro Atlanta, and one more in St. Croix. At least it's not as bad as having the entire operation moved from Atlanta to the Virgin Islands, but keep an eye out for that.

I'm sure tax incentive was involved, but those are arrangements Congress should be working to eliminate. The Virgin Islands and Atlanta are both part of the U.S. I've never been to the Virgin Islands, and not too many Americans have. Its 2010 population was 105,000, down 3 percent from 2000. It's population is 76 percent black, 12 percent white and 6 percent other. The last prominent visitor was Christopher Columbus in 1493. According to the last World Almanac, the three islands in the Virgin Islands group have 2,981 sheep, 2,331 goats, 1,124 hogs and 690 chickens.

Perhaps the U.S. could make a deal to sell it to Ocwen for the tax on the CFO's income.

Millard Grimes, editor of the Columbus Ledger from 1961-69 and founder of the Phenix Citizen. is author of "The Last Linotype: The Story of Georgia and Its Newspapers Since World War II." A profile of Grimes can be found in the Georgia Encyclopedia, www.georgiaencyclopedia.org.

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