Posted on 12/18/2003 3:32:00 PM PST by sly671
Jobs come and go Walter E. Williams
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 Syndicate, Inc.
Really?! I feel so enlightened all of a sudden. Well, if you put it that way I would have to say that the price of exporting jobs would likely be higher than the price of keeping them in the U.S. if the cost of exporting jobs included disqualification from U.S. tax incentives and U.S. government contracts.
Why are you ashamed to admit you are talking about UNIONS?
Because unions are obviously your own personal little fetish. I'm referring to an array of legal, economic, and social institutions that are much, much broader than collective bargaining.
More and better production is good for all men, everywhere. What’s good for Toyota is good for America. That’s individualism, and that’s Americanism.
Government interference with free trade is un-American. Sacrificing one’s standard of living in order to subsidize inefficient domestic producers is un-American. The tribal fear of foreigners is un-American. Resentment at others’ success is un-American.
A patriotic American acts as a capitalist and an individualist: he buys the best, wherever it may be found.
BUMP
And sacrificing our own standard of living to promote foreign development is supposed to be pro-American???
gcruse, IMHO you gotta be certifiably demented.
Rand and Marx were both atheists.
Neither one was encumbered by any sense of morality.
Of course they do.
These don't raise incomes, they reduce them. They impose value judgments onto the ruthless efficiency of the marketplace.
I'm saying those value judgements should not be imposed, just that these are not institutions for increasing incomes. They are institutions for the limiting of incomes, for non-economic values.
Certainly one of the marks of civilization is the enshrinement of non-economic values in institutions. We should just call them what they are.
Then I've proven my point.
I agree redistribution is unavoidable. The amount that is appropriate is a value-question, not an economic one. It is a religious question.
All redistribution is counterproductive, economically. It should be done for moral reasons, which will make the economy weaker, in the interest of other strengths.
Congratulations.
Those whose wages are doubled.
FWIW, this has been a topic that's been on my mind a lot lately (the desirability & advisability of income redistribution as well as the overall impact of outsourcing, illegals, etc.) Yes, I confess I've been following the Exporting America series by Lou Dobbs.. ;^)
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