How to Solve Unemployment in the United States

There is a common bullshit phrase you will often hear from high-priced consultants and “touchy-feely” human resources specialists — treat your employees like assets.  Well, I think if we took this idea literally we could solve not only unemployment, but also underemployment and a whole host of other issues like company and employee loyalty.

Companies currently classify employee salaries and wages as expenses on the profit and loss statement.  Despite what the consultants and human resource professionals say, as long as employees are classified as expenses they will be viewed by management, Wall Street, and investors as just that — expenses.  And expenses are something to be minimized so as to increase profits and cash flows.

My idea, which of course would be laughed at by accountants and the finance community, would be to actually classify employees as assets.  We currently classify products in inventory, buildings, technology, and many other “things” as assets, but people are treated as expenses or expendable.  The current tax code is written to encourage businesses to invest in assets as the depreciation on those assets serve as a tax shield on the profit and loss statement.  I argue that human beings should also be classified as assets on the financial statements.  The salary and wages are investments in those assets and will be depreciated like other assets enabling the company to enjoy a tax shield from its employees.  I realize there would be many arguments about how to calculate depreciation on human assets or appreciation, but I leave the details for the accountants.

This crazy idea would give upper management, Wall Street, and the investment community a reason to support companies that hire people, train them, keep them, and further improve them like other assets.  They will like the idea of a tax shield in that taxes will be reduced and therefore profits increase as well as cash flow.  They won’t care that the idea is philosophically correct.  If we want to be American-centric (given unfair trade), we could even say that only American citizen employees will be considered assets and all foreign employees will simply be expenses.  Wouldn’t that be interesting?

By the way here is a nice picture I took today with my cheap cell phone while thinking about this crap.

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14 thoughts on “How to Solve Unemployment in the United States

    • Hi sweetie. Sorry I haven’t been around to my favorite sites for a few weeks…much to catch up on.

      You raise a good topic, but remember, I am working within the current constructs. I have to pick one issue at a time. If you want to get into solving our nations debt problem…well….you know my solution.

  1. Your idea is not radical at all. It is already in practice. Major League Baseball counts its players as assets, and under various IRS rulings and Supreme Court decisions, gets to depreciate players and expense their contracts. It works like this: You sign player A for a million dollars for two years. In baseball you get to depreciate the contract $500,000 per year because the player is a franchise asset, plus get a load of this, the baseball team for tax purposes also gets to expense the $500,000 as well each year. Yes this is double counting, and it creates tax losses that can be passed on to owners of the club if the club is held in the form of a partnership. So your idea of employees as assets already exists. And baseball gets the double dip ice cream with also the expensing, hence baseball shows IRS tax losses, and you see that all the time. But those tax losses carried back to partnerships have lucrative benefits by reducing the partners own taxes, hence the reason why so many folks pay millions and millions for baseball teams. I read all about the asset issue and the tax scam stuff in a Milwaukee Magazine article about the Return on the Milwaukee Brewers sometime in the 1990s. Maybe a few things have changed, but the asset idea is already out there. Nice post.

    • Thank you Randel for bringing up this example. I will research it a bit more. Of course giving large corporations tax breaks means we would have to start working on the other end of the pipeline…where individuals pay too much tax and the government spends too much money without accountability.

    • Companies would have an incentive to hire more people to take advantage of the tax shelter such that unemployed and underemployed could get back to full scale work and employ the energy they have to offer.

    • LOL…now you know why I created another blog…one can’t discuss solving problems within the current construct without violating truth and a philosophical mind-set.

  2. One of the most over-used but under-realized clichés is to treat employees like assets. It’s a good mantra but one that companies find difficult to heed for two (2) main reasons: ownership and self-interest.

    Nonetheless, it is in companies best interests to invest in employees, even though, strictly speaking, they aren’t (and never will be) assets. http://bit.ly/TnM506

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