Posted on 12/09/2003 10:17:58 AM PST by dead
The American economy is destroying jobs, and that's a good thing.
It is in destroying jobs that the economy improves and makes it possible for the standard of living of all Americans to increase. This constant churning means that even a "stagnant" American job market is extremely dynamic, and that the ranks of the unemployed are not necessarily the dispossessed of the earth, as Democrats tend to portray them.
Keep this in mind as Congress gears up for a debate on whether unemployment benefits should be extended beyond their normal six-month term for the fourth time in the past two years. Democrats will attack anyone opposing this extension as a heartless extremist attempting to trample on the poor. But an extension of benefits might, perversely, prolong unemployment, and it will serve to dampen the dynamism of the American economy, which is its greatest asset.
In any given year, roughly 10 percent of all jobs in the American economy are destroyed, while an equal number rises up to take their place, according to the latest Economic Report of the President. The trick, of course, is to create more jobs than are lost. Since 1980, according to Michael Cox of the Federal Reserve Bank of Dallas, "Americans have filed 106 million initial claims for unemployment benefits, each representing a lost job." But during the past decade, the economy has still added a net 40 million new jobs.
Even when the economy isn't creating net new jobs, as has been the case recently, it's creating new jobs. Payroll employment was stagnant last year. But between 3.5 million and 5 million workers entered new jobs each month in 2002. Even during a "jobless recovery," the majority of workers looking for jobs in any given month is different from those workers seeking jobs the next month.
Since 1970, the median duration of unemployment has been 6.6 weeks when the economy is growing, and 8.2 weeks immediately following a recession. In roughly 40 percent of cases, the period of unemployment is five weeks or less. So the unemployed aren't a single class of people, but a group constantly changing as people cycle in and out.
In many cases, job turnover — although painful — is a very good thing. It is by switching jobs that people learn new skills and find a better match for the skills they already have, thus earning higher wages. A typical young worker has seven jobs during his first ten years in the job market. A third of that worker's wage growth will occur when leaving one job for another.
Public policy should be leery of anything that discourages this churning in the job market. (Otherwise, four out of 10 of all Americans would still be working on a farm, as we were a century ago.) Because unemployment benefits essentially subsidize unemployment, they can have this effect, encouraging people to stay unemployed instead of jumping back into the job market.
One study shows that each additional week of unemployment benefits increases the time a person spends unemployed by a day. Indeed, the unemployed are twice as likely to find a job in the week before their benefits expire than in the weeks prior. Makes you go, "huh," doesn't it?
People respond to incentives. Experiments in a few states have shown that giving a re-employment bonus to the unemployed speeds up the time it takes them to find a new job by roughly a week. Europe has longer and more generous unemployment benefits than the United States — and also chronically higher rates of unemployment.
So, as the economy begins to purr and the unemployment rate dips, the last thing the government should do is give people a disincentive to join in the great roiling American job market. Opposing an extension of unemployment benefits isn't heartless, but an act of well-placed faith — in the dynamism of the American economy and in the resourcefulness of its workers.
— Rich Lowry is author of Legacy: Paying the Price for the Clinton Years.
OK so name the companies and the number of jobs created 2003. This is probably an unfair question to you but if what you say really amounts to more than a hill of beans, then others must know from plentiful evidence.
Yeah? When buggy whips began obsolete, they didn't start importing them from abroad. Cell phones are still "in", but the engineering is going abroad. Do you want the US to also buy weapons systems from India? (We's get their obsolete ones, you know.)
If the engineering infracstructure is destroyed, the US will not be the ones innovating for the future. Your analogy is not well thought out.
Because the new "hamberger turner" jobs offset the statistics. Those people have those great new jobs at a fraction of what they originally made. This is a reduction in American buying power and standard of living. It will eventually overtake you. Then you will wonder why nobody cares about your job loss.
It is common practice to type for postings without extensive proofing. When I type for business, I employ spell checkers and proof-readers. I write excellent technical documentation and can schedule work to within 5% of the target date. I am slightly dyslexic. It is considered bad manners to criticize postings for spelling.
I'm 54 years old and not pretty. I can, on the other hand, outwork about six people. I make few mistakes in my software, electronics circuits, and documentation. I am well organized.
The engineering jobs are just plain disappearing. Anyone who searches the internet job sites for these jobs would notice this. There are about 150 jobs nationwide for my expertise. Five years ago there were 3,000 - 5,000.
I am looking to start my own business. Unfortunately, the best prospects are not within my line of experience, training or "network". On the other hand, I build nice furniture and make award-winning black and white photographs.
It is considered bad manners to criticize postings for spelling. You have a sense of greatness over your spelling ability. I suspect I know concepts you have yet to discover. Do you wish to challenge on my turf?
Yes, there is a great divide between the people who turn hamburgers for a living, and the people who manage restaurants, and the people who own them....
There is also a great divide between those who use cell phones and those who engineer them. Users of TVs, microwave ovens, and computers are also across a great divide from those who engineer them. I am not management material. You are probably not engineering material. I suspect your head would start smoking if I explained all that happened between your keyboard and my screen. That expertise was hard won and is not replaceable. It is, on the other hand, something that can be obtained elsewhere by cheating the US labor laws through outsourcing.
I will survive on my own.
You are, however, failing to consider what happens to the United States once folks stay clear of engineering professions. Innovations will then be imported, including second-rate defense systems. Young people are already avoiding engineering careers. Do you actually believe my sorrow is entirely for myself, or could I be legitimately concerned for the future of my Nation?
My, my. You must think engineers are stupid. We do tend to be careless about trivial matters.
It is, on the other hand, pure hell to have multiple spellings for software symbols. ;-D
In the early 1990s, IBM found they had several MILLION employees that no longer had full job-responsibilities. Some four Million had no genuine job at all. At the time, IBM had a "no layoff" policy, as well as a habit of training new workers for new technologies, and retaining, but not retraining ones whose job-responsibility went away.
I believe you hit the nail right on the thumb. Once we all are reduced to "hamburger flippers", could any of us afford the cell phones?
The IBM of old always offered retraining to employees. Companies once viewed employees as assets rather than liabilities.
They have little incentive to do otherwise. I imagine soon we'll be hearing how companies want more H1-B's because Americans are too lazy to get into engineering. There in no reason for kids in high school and college to take advanced classes in math, science and other challenging fields for 4 to 7 years when technical jobs are being sent to India and China. The jobs that do remain will pay a lot less. Take a look at what kids going into college are majoring in. It's not computer science and electrical engineering...it's law! Think we have too many lawyers now?...wait a few years.
If someone types it on the internet, it must be true.
I think I owe you additional comments. I have implied admission of guilt in being an atrocious speller. That is par for engineers, and everyone who has ever worked with engineers knows this. Spell checkers rank high among our greatest achievements. ;-D
Spelling is not a strong asset in the conceptual thinking we do, nor in the implementation of the design. Once the concepts and designs are ready for public consumption, engineers are rarely asked to write the documents or make up the advertising flyers: enter the other skilled people.
I've never seen a technical writer or a market manager who can write software or solve equations for electric servo motor dynamics. I don't criticize them for those obvious shortcomings. We work as a team, each providing a piece of the total product.
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