Posted on 11/26/2003 5:44:49 AM PST by PeteFromMontana
Jobs come and go
Walter E. Williams
November 26, 2003
In 1970, the telecommunications industry employed 421,000 switchboard operators. In the same year, Americans made 9.8 billion long distance calls. Today, the telecommunications industry employs only 78,000 operators. That's a tremendous 80 percent job loss.
What should Congress have done to save those jobs? Congress could have taken a page from India's history. In 1924, Mahatma Gandhi attacked machinery, saying it "helps a few to ride on the backs of millions" and warned, "The machine should not make atrophies the limbs of man." With that kind of support, Indian textile workers were able to politically block the introduction of labor-saving textile machines. As a result, in 1970 India's textile industry had the level of productivity of ours in the 1920s.
Michael Cox, chief economist at the Federal Reserve Bank of Dallas, and author Richard Alms tell the rest of the telecommunications story in their Nov. 17 New York Times article, "The Great Job Machine." Spectacular technological advances made it possible for the telecommunications industry to cut its manpower needs down to 78,000 to handle not the annual 9.8 billion long distance calls in 1970, but today's over 98 billion calls.
One forgotten beneficiary in today's job loss demagoguery is the consumer. Long distance calls are a tiny fraction of their cost in 1970. Just since 1984, long distance costs have fallen by 60 percent. Using 1970s technology, to make today's 98 billion calls would require 4.2 million operators. That's 3 percent of our labor force. Moreover, a long distance call would cost 40 times more than it does today.
Finding cheaper ways to produce goods and services frees up labor to produce other things. If productivity gains aren't made, where in the world would we find workers to produce all those goods that weren't even around in the 1970s?
It's my guess that the average anti-free-trade person wouldn't protest, much less argue that Congress should have done something about the job loss in the telecommunications industry. He'd reveal himself an idiot. But there's no significant economic difference between an industry using technology to reduce production costs and using cheaper labor to do the same. In either case, there's no question that the worker who finds himself out of a job because of the use of technology or cheaper labor might encounter hardships. The political difference is that it's easier to organize resentment against India and China than against technology.
Both Republican and Democratic interventionist like to focus on job losses as they call for trade restrictions, but let us look at what was happening in the 1990s. Cox and Alm report that recent Bureau of Labor Statistics show an annual job loss from a low of 27 million in 1993 to a high of 35.4 million in 2001. In 2000, when unemployment reached its lowest level, 33 million jobs were lost. That's the loss side. However, annual jobs created ranged from 29.6 million in 1993 to a high of 35.6 million in 1999.
These are signs of a healthy economy, where businesses start up, fail, downsize and upsize, and workers are fired and workers are hired all in the process of adapting to changing technological, economic and global conditions. Societies become richer when this process is allowed to occur. Indeed, because our nation has a history of allowing this process to occur goes a long way toward explaining why we are richer than the rest of the world.
Those Americans calling for government restrictions that would deny companies and ultimately consumers to benefit from cheaper methods of production are asking us to accept lower wealth in order to protect special interests. Of course, they don't cloak their agenda that way. It's always "national security," "level playing fields" and "protecting jobs". Don't fall for it -- we'll all become losers.
©2003 Creators Syndica
Like what, he didn't tell us what labor will get freed up for? No matter what industry Americans get into, it can be done cheaper abroad when workers are making only a fraction of the going wage rate in the states. Can't say I blame a company for moving to China when they can pay workers 20 cents an hour.
It's also quite naive to think millions of workers can be displaced thanks to government policy and they'll just find something new tomorrow. What if they don't? There are only so many hamburger flipping jobs to go around.
SOBS ruined my buggywhip business!!!!!
(I want a pony!)
(/Protectionist rant)
I've been bitter ever since stay makers and coopers were forced out jobs.
My family started out farmers (200 years ago), later became coal miners (100 years ago). My grandfather and dad worked in a steel mill, which is now closed down. This generation of The Family are mostly linked to technical jobs or teaching. My ancestors lived a hard life and died early. My father’s job was dirty and dangerous and he almost died several times (and others around him didn’t make it). I just have to try to not get fat while I sit on my @ss all day. Some day, our kids will do something that, like my job, didn’t even exist 20 years ago. Somehow we all survive, at least the ones who are not overly stupid. Adapt or die.
What is, all of them!
I'll take "Americans Innovate and Adapt" for 1200 Alex.
My grandfather had his head smashed to a jelly in a coal mining accident 20 years or so before I was born...Now I sit here making more money than he could even imaging doing "Systems Consulting" (whatever that is???)
I wish someone would have protected his job so I could be doing it now!!!
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